Nationwide, the total student loan debt of $913 billion is more than total credit card debt. While those who are in credit card debt have options such as bankruptcy to get out of that debt, student loan borrowers do not; Florida students and recent graduates are feeling the financial pressure of student loan repayment.
In this difficult job market, nearly two-thirds of graduates throughout the United States are in debt after finishing college. Many are unable to find a job at all, let alone one that will allow them to make payments on student loans. Nationally, an average of 7 percent of student borrowers defaulted on loan payments last year; 8.5 percent of Florida borrowers were unable to pay their student loans. With the national rate of default raising to almost 9 percent already this year, student loans continue to be a growing problem.
Defaulting on, or not paying, a student loan can have drastic consequences. To collect on the debt, the government is able to:
- Garnish wages once a defaulting borrower does get a job
- Take money out of any federal income tax refund or Social Security payments
- Prohibit borrowers from entering military service
- Disallow receipt of a professional license
Student loans are, for the most part, non-dischargeable in bankruptcy and will stay with the borrower until he or she pays off the loan. A borrower may have options for bankruptcy relief, however, if he or she has other debt, such as credit card debt or a mortgage that may be dischargeable in bankruptcy. Freeing up the money that was used to pay the dischargeable debts may allow him or her to use that money to make student loan payments. Contact an experienced Orlando student loan help attorney to see what options are available for you and your student loan debt.
Many schools are now incorporating financial education classes into required curriculum in an effort to educate students about the consequences of borrowing money. Student loans should be used to pay for education expenses rather than allowing a student to live a lifestyle that he or she otherwise would not be able to afford.
Source: Orlando Sentinel, 8% of Florida students default on school loans,” 5/30/2011