When I graduated in 1998 I had approx $40,000 in stafford loans. In 2001, I had to file bankruptcy and while in bankruptcy my loans interest was compounded. Now my balance is $94,000 and the majority of the balance is interest. I feel that the interest should not have compounded while I was in bankruptcy. My interest rate is 7.8% and if I choose to consolidate my loans, my interest rate will be about 7.5%. I feel hopeless. The large payments are a burden and they only cover the interest. I don’t see how I can ever pay them off.
Is there anyway that the compound interest can be reduced? Is there anyway to remove this dept in another bankruptcy because of such a burden on me? The way it is now, the only way to be relieve of the massive amount is if I die.
The most critical part of this issue is if your student loans are private of federal. Which is it?
You can always call your loan servicer and talk to them about what options may be available for you. If you have any doubts about government program eligibility you can use the CFPB student debt repayment assistant tool to see what is available.
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