Over 40 million people in the U.S. are struggling with student debt every day, and that number continues to grow. At the time, you thought you were making the right decision by choosing to go to school. You knew that student loans were inevitable, but the consequences of those loans were more dire than you realized.
Now a day’s student loan debt has grown into a much larger problem than many realize. It has moved from a problem to an epidemic. Currently, there is more student loan debt than credit card debt. The only debt that surpasses student loans is home loans. Today Americans owe over 1.48 trillion in student loan debt, and there are 44.2 million American who owe student debt. In honor of our Student Debt Awareness month, let’s look at some student loan myths and what can really happen if you do not pay up.
Ignoring the Problem Will Not Make it Go Away
Student Loans are one problem that you can’t ignore because ignoring this problem means a lot more trouble for you. As I stated above the total student loan debt in over a trillion dollars, with the average amount owed around $24,000. Per an article on studentloanhero.com, the student loan delinquency rate is around 11.2%. That means almost 4.3 million bowers are in default. Defaulting on a student loan is the one thing that you don’t want to do. Defaulting occurs when you do not make your monthly payments. The consequences for defaulting are severe because the moment you default the total outstanding balance including interest becomes due immediately. This means you will no longer be eligible for deferment or repayment plans. Furthermore, you will not be able to apply for any more student aid and the loan will then be transferred to a collection agency. With millions struggling to repay their loans there are options.
Help is on the Way
While student loans are a scary thing to think about the good news there are helpful avenues out there.
Create a Plan: The first step to ensure you are not blindsided when all your debt comes to a point is to make a plan. Prepare for the inevitable and work out a repayment plan that works for you. Get organized and figure out what you can afford an apply it accordingly.
Get Educated: Yes, I know that is what got you into this mess in the first place but knowing exactly what your student loan is can be extremely beneficial in the long run. Many struggles stem from the fact that many do not know what their student loan is. Get educated and utilize the many resources out there.
Beware the Scammers: When you are seeking help to repay, your loans beware the scammers. There are many companies out there offering loan forgiveness or quick easy repayment plans that seem like a dream come true. Unfortunately, these are mostly scams. There are companies out there who are legitimate but to know who is who make sure you do your research.
To summarize make sure to create a plan, budget accordingly, and do your research. Do not fall victim to the student debt epidemic.
Written By: Rebecca Kidd