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If you have federal student loans, you can qualify for income-based repayment plans. People with unmanageable student debt have several options: Kantrowitz recommends that students generally take out no more debt than their expected first year's salary out of college. You can avoid defaulting by borrowing an appropriate amount for you or your children's college education. "Students who drop out of college are four times more likely to default on their loans." "We don't have a student loan problem, we have a college completion problem," said Mark Kantrowitz, vice president of strategy for college and scholarship search site. The increasing student loan default rate may have more to do with whether students finish their degrees than the rising cost of higher education. Borrowers in default can also have their wages garnished and their tax funds seized. People who have defaulted on their student loans "are going to have a tougher time passing an employment verification check, saving for retirement or ever buying a home," Chopra said. In all, 1.1 million more borrowers went into or re-entered default last year. More than 4.2 million borrowers were in default as of the end of 2016, up from 3.6 million in 2015.
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Last year, 42.4 million Americans owed $1.3 trillion in federal student loans. "Despite a booming stock market and unemployment falling, student loan borrowers are struggling," said Rohit Chopra, a senior fellow at the Consumer Federation of America and a former student loan ombudsman at the Consumer Financial Protection Bureau. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit