Million-Dollar Student Loan Balances Are Extreme But Can Be Manageable, Says Ameritech Financial

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May 30, 2018, 08:00 ET

ROHNERT PARK, Calif., May 30, 2018 /PRNewswire/ -- It seems that every week there's a new shocking story about student loans. Recently, the big story was about a borrower, Mike Meru, who owes more than a million dollars in student loan debt. While that may sound like a nightmare, that situation is very rare, and only about 101 people in the U.S. have loan balances that high. Ameritech Financial, a document preparation company that assists borrowers with federal repayment plan applications, reminds borrowers with high balances that they may benefit from income-driven repayment plans.

"A million-dollar balance might be a sign that the student debt problem is getting beyond control," said Tom Knickerbocker, executive vice president of Ameritech Financial. "But high balances are not typical of the average borrower. In fact, high balances usually just mean the borrower got an advanced degree that should also increase their earnings to offset the additional debt."

Articles from earlier this year have described that many student loan borrowers with high balances are not making progress on their loans. However, such borrowers often have high debt because they obtained an advanced degree, and they are more likely to be current on their loans than those with low balances and no degree. Meru accumulated over $600,000 to get an advanced degree for orthodontia, which is one of the most expensive degree programs.

Many high balance borrowers are taking advantage of federal income-driven repayment plans (IDRs) to reduce payments and extend repayment. After all, it can be extremely difficult to find employment at the beginning of a career that would allow a borrower to pay off mortgage-levels of debt in 10 years. For example, Meru has monthly payments of $1,589.97, which doesn't even cover all the interest that accrues each month.

Federal IDRs calculate monthly payments on income and family size and can end in forgiveness after 20 to 25 years of enrollment. Borrowers in IDRs often have reduced payments that can ease financial stress and even allow them to work toward other financial goals that they would not be able to pursue otherwise, like saving to buy a house or building a retirement account.

"High balances can be scary, but that's why federal repayment plans are so valuable," said Knickerbocker. "At Ameritech Financial, we help borrowers understand such programs in the context of their financial situation, and we help with application paperwork if they decide to pursue one of the IDR programs available through the Department of Education."

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional customer service.

Ameritech Financial Newsroom

Contact

To learn more about Ameritech Financial, please contact:

Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
1-800-792-8621
[email protected]

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Shock at High Student Loan Balance
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SOURCE Ameritech Financial