Ever since the Great Recession put the strangle hold on the U.S. economy back in 2008, the default rate on student loans has skyrocketed.  This in turn has increased the debt collection case-load among the various United States Attorneys.

Michigan, hit particularly hard in the recession, is ranked 11th among the states in overall student debt load.  A full ten percent of the loans to Michigan students are defaulted.  The problem has become so acute, the U.S. Attorney's Detroit office hired a private law firm to aggressively pursue claims against students that defaulted on federal government loans.

Due to the number of public and private educational institutions located within the jurisdiction of the United States District Court for the Eastern District, and considering the drastic tuition increases to which these institutions have resorted, the USDC - EDMich has one of the most robust civil collection dockets in the nation.

It is crucial for college grads, law students, and other graduate students to avoid getting enmeshed in this collection docket.  Unfortunately, bankruptcy is not an option for educational loans.

The crux of the problem is that the ever-increasing student loan burden is met at graduation with a continuously shrinking job market. A veritable disaster waiting to happen; a disaster that is happening.

What is a graduate to do?  First, do not ignore the problem.  These loans will not go away, regardless of the nievete or hard luck of the student borrower.  Ignoring the debt will only remove any repayment options such as forbearance or rehabilitation periods.

Second, student debtors should thoroughly educate themselves on the student loan statutes and regulations prior to commencing negotiations with the federal lender or collection entity.  The Internet is an excellent source of information that will lead the borrower to primary resources.

Third, consider hiring legal counsel to assist you with negotiations with the lender; definately hire legal counsel if you have been sued.

Fourth, if you are a current student, scour the Internet for as many grant and scholarship opportunities as you can find prior to executing additional loans.  There is "free" money out their for students; you just have to find it.

Finally, be realistic when establishing your educational goals.  Avoid paying out-of-state tuition if at all possible.  Michigan has many great institutions of higher learning that fit the bill.

Good luck out there getting educated.  Take it seriously as you are mortgaging your future to obtain your degree.

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