ROHNERT PARK, Calif., Jan. 12, 2018 /PRNewswire/ — Researchers at the Federal Reserve Bank of New York published data on student loan borrowers last fall revealing that students who attended certain types of schools are more likely to default on their loans, specifically students who attended for-profit institutions. This signals that certain student loan borrowers are not receiving the help they need. Ameritech Financial is a document preparation company that helps federal student loan borrowers identify, apply for, and stay enrolled in repayment plans that are intended to help prevent default.
“Students from for-profits who are defaulting on their loans may feel like there’s nowhere to turn,” said Tom Knickerbocker, Executive Vice President at Ameritech Financial. “But that’s simply not true. Ameritech Financial can provide assistance in guiding struggling borrowers to federal loan repayment programs.”
The research from the New York Fed shows not just that for-profit school attendees are more likely to default on loans, but that certain types of for-profit institutions and degree programs make borrowers more susceptible to default. In terms of institution type, borrowers who attended for-profit two-year schools are at the highest risk to default; in terms of degree type, associate’s degree holders and non-graduates are at the highest risk. Risk for default increases with age for all groups. The people least likely to default attended private, four-year nonprofit institutions and graduated with bachelor’s degrees.
While these are troubling statistics, the good news is that default does not need to be an inevitable outcome of struggling borrowers, even those who are experiencing a lot of financial difficulty. Student loan borrowers with federal loans may be eligible for certain repayment programs offered through the Department of Education that can potentially dramatically reduce their monthly loan payment. For some, selecting the right option and successfully enrolling can be difficult, though. Ameritech Financial helps their clients identify the right plan for their situation and apply for that plan. If the borrower is successfully enrolled in a plan, Ameritech Financial will assist the borrower in staying in that plan for as long as is needed.
Despite recent scrutiny of for-profit schools, the Department of Education has suspended certain regulations concerning for-profits that were enacted during the Obama administration. The Department has also revealed that it is only granting partial relief for some students who were defrauded by now-defunct for-profit school consortium Corinthian Colleges. Critics of the new policy, including Massachusetts Attorney General Maura Healey,