He had $55,000 in student loans, now he owes $330,000. Here's how it happened.
. That's in part because many people are seeing their individual balances spiral out of control.
In response, many schools hire consultants to encourage struggling borrowers to put their loans into forbearance — a temporary postponement of their payments, for that three-year window, according to an AprilAlthough forbearance does avoid a default, the solution is temporary, and is sometimes suggested over other, potentially more affordable options for borrowers, such as income-driven repayment plans, the GAO found.
Debbie Baker took out $35,000 in federal student loans while at the University of Tulsa in the 1990s, to become a music teacher in Oklahoma's public schools.Her student loan servicer, Navient, previously Sallie Mae and currently one of the biggest loan servicers, encouraged her to put her loans into forbearance, she said.When she had to start making payments on them, her monthly bill had swelled to $700, she said.
"As a servicer, we are proud of our track record to assist customers in successfully managing their student loans," Lavoie said.The biggest reason Tallini's student loan debt increased so much is because of his extended periods of nonpayment, during which his debt was growing at between 8 percent and 9 percent interest. .
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