-: What If I don't Pay my Student Loans

What Happens If You Don't Pay Off Your Student Loans and Just Say "Fuck It"?

You can completely disregard your college loans...but you should be aware of the implications.

Student debt is suffocating a whole generation of Americans. For decades, individuals were urged to prioritize higher education, and one of the most powerful motivators was the relatively simple procedure of obtaining a loan to cover tuition and living expenses while earning a degree. I remember applying to universities and being really taken aback when I received my Financial Aid package—it seemed ridiculous that the government was willing to give me, a well-known 18-year-old moron, so much money.

And, to be honest, it was wonderful. Giving loans to students like myself has directly resulted in the current situation: 45 million people in this nation owe a total of $1.7 trillion (an average debt of $38,000). Many factors have contributed to the crisis, including the ease of obtaining a loan, students borrowing the maximum amount approved for rather than only what they truly need, and a lack of understanding about the repayment process...as well as the sheer need for the loan to achieve the American dream that they were promised would come with a college education and hard work.

In reality, an increasing proportion of student loan borrowers will be repaying their debts for the rest of their lives. And the prospect of President Biden eliminating some or all student loan debt is becoming increasingly implausible, which may lead you to ponder what would happen if you simply...ignored them. What happens if you simply cease making payments and continue about your business? How long will you be burdened by school loans?

In a nutshell, forever. Until you're no longer alive. In certain circumstances, after you've passed away. The longer explanation is that it is difficult.

What to think about if you want to disregard your student debts

Here are some things to think about if you're considering of just saying "fuck it" and walking away from your student loan debt:

Reports on credit

Because your student loans are, well, loans, they appear on your credit record and have an impact on your credit score. And they will remain there for seven years after your first offense (the fact that this is the word we use for desperate financial circumstances tells you a lot about capitalism). You probably won't be able to delete the loan off your credit report unless there is a major error, so an overdue loan will make your credit score appear like a batting average, affecting your ability to receive further loans, get job, rent an apartment, and do anything else that involves money.

The debt can be deleted from your credit record after seven years, but its bad repercussions will linger for a bit longer—however, the farther back the loan dives, the less influence it will have on your score.

There is one big exception: if your loan is a Perkins Loan, it will remain on your credit record until it is paid off, no exceptions. They ceased giving this need-based loan in 2017, so if you have current student loan debt, you presumably don't have one of them.

Bankruptcy

In general, student debts cannot be discharged through bankruptcy, so even if you're willing to blow up your financial life, you'll still have to deal with those obligations.

Forgiveness

There are various options for getting your federal student loans forgiven. After 10 years of working for the government or a qualifying non-profit organization and making monthly payments, your loans will be forgiven under the Public Service Loan Forgiveness Program. The objective is to make those monthly payments as low as possible in order to maximize your advantage.

There are also numerous income-driven payment plans available that can qualify you for loan forgiveness in 20-25 years, even if you haven't discharged the whole amount...which, yay? You can also get your loans canceled if you are completely handicapped or if you are a teacher who qualifies for Teacher Loan Forgiveness. But that's all.

What consequences will you face if you ignore your student loans?

Assume you're willing to accept the credit hit and don't mind the government hounding you for the money. You stop paying payments, disregard all of the difficulties, and spend your excess money on extravagant goods like food and shelter. What happens in the long run?

To begin, keep in mind that deleting your debts off your credit record does not absolve you of responsibility for them. They will follow you for the rest of your life unless you pay them off or discharge them via a forgiveness program. Even if your loan has been removed from your credit record, collection agencies may continue to hound you to pay it off—and if they fail, the federal government may step in to collect, which may be quite unpleasant. The government may seize your tax refunds and garnish your salary in ways that collection companies cannot, and you have little power to stop them.

Furthermore, certain college loans can follow you to the grave—and beyond. If you had a cosigner (say, a parent) and you died before them, they can be held liable for the amount regardless of how much time has passed.

In conclusion

You may say "screw it" and walk away from your college debts, but there will be repercussions. After seven years, you may have these outstanding loans removed from your credit report, which will relieve some of the stress, but the threat of being sued by the government and having your income garnished will remain. So, ultimately, we may need to amend the ancient adage about death and taxes to include something about student loan debt, since the government will continue to try.

#StudentLoans
#SarcasticGamer #SarcasticReview

SOURCE: lifehacker

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