NEW YORK (MainStreet) Financing his college education with private student loans was the single biggest mistake that Anthony Hardman made.
Hardman is now being sued by the lenders, because he could not make the $1,200 monthly payments after graduating in 2006. Filing for Chapter 13 is the only option he has now, which will give him a reprieve on his monthly payments for five years and gives him an opportunity to save money to pay off the remainder of his loans.
"I'm in student loan hell," said Hardman, who is the director of public relations for Access Advertising + PR in Roanoke, Va. "I financed my education with private student loans, and I had no idea what I was getting myself or my parents into. My lenders would not work with me. They disbursed several different loans and wanted payments on all of them, which totaled out to be a huge lump sum."
Hardman's sentiment is similar to that of many graduates who face mounting student loan debt that they are unable to afford even after they have been employed for several years.
While borrowers were more likely to say that their student loan was a good investment than a bad investment by a two-to-one margin, more U.S. adults would not recommend student loans as a way to finance a college education, according to a National Foundation for Credit Counseling (NFCC) Financial Literacy Survey.
Some graduates said if they had realized the amount of student loan debt that they would accumulate, they never would have taken out the loans. Many of them said they would have benefitted from financial counseling before and after taking out the loan. Others admitted that it is difficult to find the right student loan repayment program for their situation.