Finishing college is a dream of every American. To get a good education, get a stable job, build a family, and then live happily ever after. Unfortunately, that dream is dashed as soon as you get out of college. Aside from the debatable quality of education you are bringing to the “real world,” there is one other thing that you will bring out of college that will welcome you to the truth of being adult: student loan debts.
Even before you get a job, you have already amassed a significant amount of debt. And in recent years, more and more students are taking student loans. The class of 2014, in fact, was hailed as the most indebted class ever by the Wall Street Journal as graduates are now on track to pay up to $33 thousand in student loan debts in the future. It is no longer a surprise why student loans have become the second largest source of personal debt in the US, even surpassing credit card debts.
If that does not sober you enough, it looks like you will be carrying these debts into much of your adult life.
Two-Thirds Student Loan Debts Belongs to People Over Age 30
That is right; the money that you would have used to buy that red Corvette while going through your middle age crisis might not be there anymore because it was used to pay for your outstanding student loan debt. According to the Wall Street Journal in 2012, middle-aged citizens are having difficulties making payments for their student loan debts. The delinquency rate for people aged 40 to 49 is at a high of 11.9 percent. To add insult to injury, defaulting on student loan debts can have adverse effects on your credit rating as well.
You Can Carry Student Loan Debt into Your Twilight Years
If you thought you will just be relaxing after retirement when you hit 60, you may be in for a surprise. The numbers of people over 60 who still have student loans have increased up to 850 percent in recent years. According to the National Journal, majority of the debt held by people over 60 was for student loans.
Student Loan Debts Increase While Income for New Graduates Decreases
Graduates are just not getting the right opportunities after college for them to be able to sustain a satisfactory life while responsibly paying their debts. The numbers tell the story, from 2005 to 2012; the median salary actually fell to 2.2 percent while the average student loan debt increased to 35 percent. So the likelihood of more people not being able to fully pay their student loan debts till their late years is increasing at an alarming rate.
So what can people do to responsibly handle these debts? Chapter 7 Bankruptcy is an option but you would have to prove that it will cause you undue hardship for it to be discharged. If you have an unresolved federal student loan conflict, you may ask for neutral help from the Ombudsman.
There are also a lot of income-based repayment plans that you can take advantage of. To know the best course of action, consult with an expert lawyer at Van Horn Law Group first.