With student loan debt now topping $1 trillion and fewer high paying jobs being added to the market, the burden to repay this deficit is harder than ever. Though student loan debt now outweighs credit card debt in the United States, there are very few solutions to alleviate this burden. Knowing more about how student loan debt works and how it impacts finances can help you avoid the headaches that accompany trying to repay this debt. Since filing for an Ohio bankruptcy is rarely an option for student loan debt, it’s important for borrowers to know the long-term impact it has.
How Student Loan Debt Impacts Your Life
Student loans open the door to a brighter future through higher education, but there’s also a trap door that leads to financial troubles. Whether you’re about to take out a loan or are in the process of repaying student loan debt, knowing more about this type of debt can guide your financial decisions. Little known facts about student loans include:
It “is” but isn’t dischargeable for bankruptcy. Commonplace knowledge is that you can’t discharge student loan debt through a bankruptcy. This is false. Technically, you can discharge the loans. However, it’s the most difficult filing to have approved. To qualify for bankruptcy for student loan debt, you have to prove that repaying the loans would be an undue hardship that would prevent you from achieving even a minimal standard of living.
Co-Signers can suffer too. Many parents and family members don’t think twice about co-signing a loan for their child. However, this means that they’re just as responsible for the student loan debt as the student. Since these loans are rarely discharged through bankruptcy, any financial struggle on the behalf of the student means that cosigners will be pursued for the remaining balance. When retirement should be the focus for parents and older citizens, their co-signature becomes a hindrance to their financial health.
Most graduates forward 25 percent of their monthly income to student loans. Student loan debt payments are taking up a larger portion of budgets. This makes other areas of life a struggle beyond the loan payments themselves