Student loan debt is a pressing issue affecting millions of people worldwide. The total outstanding student loan debt has surpassed $1.7 trillion in the United States alone. With such a staggering amount of debt, it’s unsurprising that many borrowers struggle to keep up with their payments, and some even default on their loans.
However, behind every default payment is a company like yours that needs to collect. It’s easy to get frustrated and blame laziness or immaturity on a customer who misses a monthly payment or two.
Today, let’s look past the frustration into what lies behind student loan default and how you can help get the weight off of everyone’s shoulders through third-party consumer collection services with Lockhart, Morris, & Montgomery (LMM).
General Financial Hardship
Financial hardship is one of the most common reasons people default on their school loans. Even with the grace period some lenders grant after graduation, graduates can still struggle to find a well-paying job in their field.
Not having a job in their field, or any job at all can leave them with limited income to cover their expenses, including their student loan payments. In some cases, people may have taken out loans that are simply too large to manage without a well-paying job, leaving them with little choice but to default.
Education Is More Expensive Than Ever!
Another factor contributing to student loan default is the high cost of education. With a national average of over $25,000 per year, higher education costs have increased significantly over the past few decades, making it difficult for many families to afford it.
As a result, more students are taking out larger loans to cover the cost of tuition, books, and other expenses. When these loans become due, it can sometimes be a hard wake-up call for someone who has come from a lower-income situation, cannot find a job, and could be forced to default to make daily ends meet.
Misunderstanding Loan Terms and Conditions
In addition to financial hardship and the high cost of education, the complexity of taking out and repaying loans can lead borrowers into default. Some borrowers may not fully understand the terms and conditions of their loans, leading to confusion and mistakes when making payments. Others may simply forget specific grace period end dates, not realize their payments are due, and join the throngs of defaulters without knowing it.
While it should be a borrower’s responsibility to understand the ins and outs of their student loan, many of these people are just entering adulthood and are still learning what it means to live in the real world, leading to our final point.
Lack of Resources for Student Borrowers
Lack of general support and resources available to borrowers is a big part of what causes loans to default. In many cases, borrowers are left to navigate the complex world of student loan repayment independently, with little guidance or support from their schools or lenders.
While there are plenty of online publications from reputable sources that help dissipate some of the static surrounding student loans, many people need a physical person to talk to, and that isn’t always readily available.
When confusion sets in, it’s easy for indifference to take over and student loans to go unpaid for months or even years.
How Can LMM Help You Recover Defaulted Student Loans?
LMM is a debt collection team that specializes in collecting defaulted student loans. Since our establishment in 2004, we’ve seen it all and have a thorough understanding of all possible situations that lead to defaulted student loans.
Our agents practice compassion and professionalism to work with your customers and resolve student debt quickly.
We use state-of-the-art technology to find and reach defaulted borrowers, so you don’t have to spend your valuable time cold-calling and hoping you reach the party in question.
Resolve Defaulted Loans Today, With LMM!
As you can see, many factors contribute to student loan default. From financial hardship to the high cost of education, borrowers face many challenges that can make repaying loans difficult.
At LMM, we believe everyone wants to pay off their debt; they just don’t always know the first steps. That’s where we step in. Let us help you ease your financial stress and collect your debts while maintaining your excellent reputation.
Contact us today to learn more about our process.