Will You EVER Be Able to Pay off Your Student Loans?
While the obvious answer may be “yes”, there is a growing concern among many college students (current and former) that they will never be free of this burden. The United States cannot count itself among the several developed countries that offer virtually free college education. Crushing student loan debt is stopping many millennials from buying cars, homes, and even basic necessities.
According to a recent survey by Fidelity, up to 40% of college grads would have made different decisions regarding their educational experience. To make matters worse, 1 in 5 college graduates are working in a job that does not require a degree. As a nation, students are sharing a loan burden of over $1.5 trillion. Additionally, only 65% of students that borrowed to attend college intend to pay off their student loans in full and on time. As student loan debt skyrockets, income for college graduates is up less than 1%.
How Is This Affecting Borrowers After College?
Well, let’s gain some perspective. Over 3 million senior citizens are currently still paying off their own student loans. This same age demographic owes over $85 billion. They are using their own social security benefits to pay down their student loans. Additionally, get ready for this…101 people in the United States have over $1 million in student loan debt each!
So, how are the typical borrowers doing right now? Well, by 2023, up to 40% of them could default on their loans. In a recent survey, 13% of the participants said they decided not to have kids because of student loan debt.
Bankruptcy and Student Loan Debt
It is very difficult to get student loan debt discharged through bankruptcy. To get the debt canceled, you must prove that the payments cause insurmountable hardship for you and your dependents. Using what is called the Brunner Test, you must be able to prove:
the payment would make it impossible for you to maintain the minimum standard of living;
the circumstances will remain for the life of the loan; and
you have tried to make payments or payment arrangements.
This may not sound too difficult to prove, but there may be different interpretations for “minimum standard of living”.
What Are Some Loan Modification Options?
Since discharging student loan debt is not only unsavory but also nearly impossible, what other options exist? Well, some loan modification options are available. If you have borrowed from the federal government, you can switch to an income-based repayment plan, defer payments, and/or explore loan consolidation.
Private loans may offer similar options, but in many cases, they are less flexible than federal loans.
Student loan debt can be overwhelming. Graduating from college is supposed to unlock possibilities, but this can be stifled by unmanageable monthly payments. If you are buried in student loan debt and want your life back, contact Elias Dsouza of Dsouza and Strachan Lawgroup Group. Elias is a skilled, licensed attorney and he can help you get the freedom you deserve.