Article: Drowning In Student Loans

I post this article for two reasons:

  1. Good information for people who are feeling crushed by their student loan payments.
  2. Note to self: Develop StudentLoanConsulting.com to take advantage of the growing demand for everything having to do with student loans.

January 11, 2008
When You’re Drowning In Student-Loan Debt
By SUE SHELLENBARGER
Staff Reporter of The Wall Street Journal

Question: My daughter, who just received a master’s degree in counseling, has a heavy college-debt load. She’s been paying $100 a month on her student loans. One bank that gave her a private student loan, however, wants $700 a month and is threatening to turn her loan over to a collection agency, garnish her wages and take her old car. What should she do? — E.K., Kirkland, Wash.

Answer: I can’t offer legal advice specific to your daughter’s situation. In general, private student loans lack certain borrower protections afforded by government-sponsored loans, such as flexible repayment, says Deanne Loonin, an attorney with the nonprofit National Consumer Law Center, Boston. Borrowers should carefully read loan agreements; some spell out specific relief, such as forbearance for as much as a year, Ms. Loonin says. Lenders collecting private student loans generally must get a court order before they can garnish wages, she adds. The center’s Web site, www.studentloanborrowerassistance.org, has an abundance of information on borrowers’ rights and finding legal help.

Federal law prohibits abusive and unfair practices by collection agencies; most states also have their own debt-collection laws. Borrowers can research their rights through state or county consumer-protection agencies, findable at www.consumeraction.gov/state.shtml. Many people in your daughter’s position benefit by contacting a certified credit counselor; see www.nfcc.org, the Web site of the nonprofit National Foundation for Credit Counseling, to find an agency in her area. Meanwhile, she should keep written records of all her communications with the bank.

Question: I saw your story on how more employers are hiring people to telecommute right from their first day of work. Can I find these high-quality salaried work-at-home jobs through Internet job boards? — P.P., Queens, N.Y.

Answer: Yes, but you’ll need to read and screen postings carefully to distinguish them from exploitative piecework or outright scams. Typing the word “telecommute” into the keyword search box on any of the big job boards will bring up hundreds of postings. But not all of them are legitimate, and not all are even work-at-home jobs; some postings pop up because they contain the words, “Opportunity to telecommute: No.”

After clicking on a job listing, read the summary box carefully. Monster.com, for example, includes a “status” descriptor — whether the position is for a full-time employee or a temporary, contract or project worker. Postings for high-quality jobs usually contain specific information about both the employer and the position, spelling out such details as eligibility for benefits. Other ads force the job seeker to guess at what kind of relationship is being advertised — usually a bad sign.

Avoid any pitch that asks you to put up money; disclose your Social Security, credit card or bank account numbers; engage in any financial transactions, or reveal such personal information as your marital status, age, height or weight. To check out an employer, see the Web site of the Better Business Bureau, www.bbb.org, which posts the outcome of its consumer-complaint investigations. Also, at www.ftc.gov, the Federal Trade Commission’s site, information about rip-offs the agency has prosecuted can be found by typing “work at home scams” or “work at home fraud” in the search box.

The job boards screen postings to varying degrees. Monster.com reviews companies that use the site and uses technology that flags questionable ads. Its staff reviews incoming postings and audits its listings, a spokeswoman says. HotJobs.Yahoo.com monitors listings, investigates job-seeker complaints and removes fraudulent postings; the site also requires any fee or investment asked of job seekers be made part of the job title, so it’s among the first thing a reader sees, says Mike DeLuca, vice president, sales. CareerBuilder.com reviews and screens out postings that violate its standards, including those that ask applicants for financial transactions or personal information, a spokeswoman says. Jobster.com screens postings it receives directly but also aggregates a range of listings from across the Internet.

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