Large amounts of student loans continue to be a problem for many people. The Washington Post recently reported on a Federal Reserve study concerning student loans and homeownership. According to that study, approximately 400,000 people in their 20s and 30s were unable to buy a home between 2005 and 2014 because of student loan debt.
According to the Washington Post article, the Fed examined census data for that age group. The census data reflected an 8.8% drop in homeownership among that group. The Fed estimated that of that percentage, about 2% was due to student loan balances, equating to almost 1 in 4 people – roughly 25%.
These numbers certainly have an economic impact and an impact on those who want, but cannot purchase a home.
The Burden of Student Loan Debt
Student loan debt is virtually impossible to eliminate. For those with significant student loan debt, the option is to pay or be saddled with the debt indefinitely. Inability to pay can lead to administrative wage garnishments, income tax refund intercepts, and the full range of debt collection tactics employed to collect any past due debt.
But student loan debt is not limited to younger people. The article noted that 34% of families headed by a person aged 35 to 44 have student loan balances.
Further, twenty-four percent of families headed by a person in their forties and fifties have student loan balances. The Fed also noted the sharply rising costs of education, having risen 183% since 1998 as states have slashed funding for higher education. Because of this, student borrowers pick up the slack.
If you are saddled with overwhelming student loan debt, your best bet is to consult with an attorney knowledgeable in consumer law. While a discharge in bankruptcy is very difficult to achieve, other non-bankruptcy options may be available.
For student loan borrowers with federal student loans, repayment plans based on income are usually available. In some instances, borrowers with federal student loans may receive a non-bankruptcy “discharge” of their loan balances.
Ask for Help from a Skilled Professional
The important thing to remember is that ignoring student loan debt is the worst thing a borrower can do. If a student loan goes into default, repayment options become limited and the borrower can be subjected to wage garnishments and collection lawsuits.
Getting competent advice early on is the key to successfully resolving student loan problems. Contact one of our skilled and caring attorneys today to discuss your financial options.
Ed Woods is the Managing Attorney of several of the Bond & Botes Law Offices throughout Mississippi. He holds a Bachelor of Science from the University of Southern Mississippi, and a Juris Doctorate from Mississippi College School of Law. Ed puts his extensive knowledge of bankruptcy law to use defending consumers from debt collection lawsuits and more. Read his full bio here.