Student loan debt is no longer affecting just the borrower that took out the loan, but the borrower’s family as well. The cost to attend college has been on the rise since the early 1980s, and while that may not be a surprise in and of itself due to inflation, data shows that tuition costs are now more than double what they would have been had they increased consistently with inflation.
The Severity of Student Loan Debt
This disproportionate increase in tuition cost has led to a massive increase in student loan debt. The average debt has increased more than 60% in the past ten years alone, standing at approximately $34,000. Unfortunately, this increase in debt is affecting both the borrower and their family in a very negative way. A recent survey indicated that student loan debt was a contributing factor in over a third of divorces, and one out of every ten divorces was the direct result of student loan debt.
Student loan debt can often lead to garnishments, which in Alabama can allow a creditor to take up to 25% of the borrower’s disposable income per paycheck. Student loans are also one of the few debts that do not require a court ordered judgment before executing a garnishment. This means that the garnishment can start abruptly and without notice, eliminating the ability to properly prepare for the loss of income. A sudden decrease in income can cause obvious financial stress for a married couple, ultimately leading to a breakdown in the marriage. To make matters worse, once the decision to divorce has been decided, student loan borrowers are more likely to take on additional debt during the divorce.
Except for limited circumstances, a bankruptcy does not currently allow a borrower to fully discharge student loan debts. However, a bankruptcy does have the ability to provide temporary relief from garnishments and stressful collection calls, giving a borrower the time to adjust to their financial situation.