Ameritech Financial Warns of Extra Danger of Default for Low-Income Borrowers; Suggests Looking Into IDRs

ROHNERT PARK, Calif., March 16, 2018 (Newswire.com) - It may be easy to say that student loan borrowers should avoid defaulting, but for many low-income borrowers, it’s not that simple. When income barely stretches to cover the necessities, student debt often gets put on the back burner. And if delinquency leads to default and tax refunds are offset, low-income borrowers may lose funds they rely on year after year. Ameritech Financial, a document preparation company specializing in federal repayment plan applications, supports low-income and other struggling borrowers to consider and apply for income-driven repayment plans intended to make payments affordable and stave off default.

Many low-income individuals and families rely on the Earned Income Tax Credit (EITC), which is, according to Persis Yu in a recent article published by MarketWatch, “designed to lift people out of poverty and it’s actually a really effective tool to do that.” When that money is taken away to pay for defaulted loans, the result can be devastating for low-income households.

It is possible to prevent defaulting on federal student loans, even for those with a small income.

Tom Knickerbocker, Executive Vice President of Ameritech Financial

“Wage or tax refund offsets can be bad for families that need every penny they earn,” said Tom Knickerbocker, executive vice president of Ameritech Financial. “It is possible to prevent defaulting on federal student loans, even for those with a small income. We encourage anyone at risk of defaulting to take action as soon as possible.”

The MarketWatch article highlighted many stories of student loan borrowers whose tax refunds, including the entirety of their EITC, were offset. Most stories described how the debt was taken on for an education at for-profit institutions, who left them in worse shape than they had been in before thanks to the loans. Some of those borrowers were single parents. For any household that depends on the EITC to keep up with bills and additional household expenses, losing out on those funds can leave them in the very financial situation the tax credit is supposed to help prevent.

Borrowers who are at risk of default, no matter their financial situation, may consider federal income-driven repayment plans (IDRs). Such plans calculate payments as a percentage of income, taking into consideration family size, and may end in forgiveness at the end of the 20- to 25-year term if they remain in the program. Payments can be as low as zero dollars a month, which can certainly help low-income borrowers use their income for necessary household expenses without falling behind on their student loan payments.

“Income-driven repayment plans can be lifesavers for low-income borrowers who struggle with finances,” said Knickerbocker. “At Ameritech Financial, we help borrowers understand and apply for IDRs. We help with all the paperwork for the initial application as well as all annual recertifications to remain enrolled in the programs. We aim to support our clients as long as they remain in the program.”

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.

Ameritech Financial is a member of the Association for Student Loan Relief (AFSLR), and each representative on the phone 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.

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]

Source: Ameritech Financial