federal student loans has numerous advantages over private student loans
Dallas, TX (PRWEB) November 30, 2014
National Debt Relief recently shared in an article published November 25, 2014 how private student loan lenders are dealing with payment modifications for millions of their borrowers. The article titled “Federal vs. Private Student Loans — The Gap Is Narrowing” points out some payment modification initiatives of private lenders in a bid to help their borrowers.
The article starts off by highlighting how federal student loans has numerous advantages over private student loans. The application for the loan in itself is easier with federal compared to private loans. The flexibility in terms of repayment also favors federal student loans because private lenders tend to stick to the original rate and term regardless of the situation. But that is all changing.
Just a few days ago Wells Fargo announced it would reduce the interest rates for certain borrowers starting this month (November). It will also allow borrowers to extend their repayment periods. Since Wells Fargo holds about $11.9 billion in student loans, this change should save borrowers literally thousands of dollars.
The article also shares that Discover Financial Services is putting the finishing touches on its modification program and intends to introduce it early in 2015. It holds roughly $8.3 billion in student loans. Discover Financial Services is considering a reduction on interest rates and may even forgive the debts of some of its borrowers that can show they are in dire financial straits.
These two moves by big private student loan lenders goes to show that they see the value in helping their borrowers meet student loan payments. Private student loans, though only accounting to about eight percent of the total student loan debt takes a lot of flack for their inflexibility.
The article explains that private lenders package student loans into securities and then sell them to investors where there are restrictions that make it difficult for them to adjust the terms for individual borrowers. To read the article, click this link: [http://www.nationaldebtrelief.com/federal-vs-private-student-loans-gap-narrowing/