Many graduates are saddled with debt as they leave school behind and embark on their career. If you are having trouble with payments, know that you are not alone. Know these 10 facts about student debt:
1. More than 40 million Americans have to pay back student loans. The number affected is greater than the population of Canada, North Korea, Poland, Australia and 200 other countries.
2. Bankruptcy is not an option for discharging student debt. Companies are allowed to file bankruptcy. Gambling debts and consumer debts can be erased but not student debt. Lenders benefit immensely. In a leaked memo from Sallie Mae, their second priority is to preserve the inability to discharge education debt during a bankruptcy filing.
3. Seven million people have defaulted on payments. This has affected their credit, increased penalties and impacted upon housing prospects when running a credit check on applicants.
4. Student debt amount has increased at an astronomical rate of 500 percent since 1999. The average salary for those starting out in the careers has decreased by 10 percent within the same period.
5. Student loans can affect your employment prospects. Student loans affect credit lines. Credit checks are requested by potential employers. Some government jobs can be out of the question for those that default. A college can hold your official transcripts, not releasing when employers request verification. The Department of Education supports this behavior.
6. No more license. When a student defaults on student loan payments, they can lose their professional license. In the state of Tennessee in 2011, 42 nurses couldn’t work because their licenses were suspended. In Montana, it is possible to have a driver’s license suspended due to defaulting on payments.
7. Families inherit student debt obligations when those responsible for payments die. Legislation is continually struck down. HR 2961: The Student Loan Protection Act of 2013, AKA, “Christopher’s Law” is another attempt that would help surviving family members b e free from this student debt burden.
8. Interest rates are set to rise. During the summer of 2013, student loans were set to have variable interest rates and may increase beyond 6.8 percent in 2015.
9. The government benefits from the current student loan arrangement. A 2013 projection from the Congressional Budget Office shows that the Government made approximately $50 billion from student loans.
10. Students are delaying large purchases. The debt to income ratio for student debtors disqualifies many from first-time home mortgages. Student loan debt is an obstacle preventing millennials from buying a car, according to Dr. G. Mustafa Mohatarem, the chief economist of General Motors.
The law firm of Morgan & Morgan, Athens, Georgia, lawyers, have more than 50 years of experience helping clients negotiate bankruptcy. Contact an experienced lawyer at (706) 510-2830 for a complimentary consultation.
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