Student loan debt in the United States exceeds $1.3 trillion, second only to mortgage debt, affecting every one in five graduates. More than 7 million of those borrowers have fallen behind on payment or have been defaulted. (NY TIMES) Private lenders offer federal loans and private loans with little guidance. This creates the perfect wormhole for any struggling student eager to finish their degree. Student loan debt is a threat to the economy and personal growth of graduates, hindering them from contributing to the market and providing a solid foundation for their future while private loan companies use harsh tactics to collect. The reality is that once they leave school, they are not equipped with the basic knowledge on new payment plans that allow them to move …show more content…
They do little to educate students of the ramifications of defaulting. Student Loans are the only debt that can be garnished from your wages and tax returns without any court date. I feel as though students and their parents would be more able to make an informed decision given this information upon receiving the loan. It is also no surprise that the lower income households have the hardest time repaying these loans. The payments are not reasonable and quickly grow with compound interests rates. (PEW) The lenders also have the power to provide you with knowledge that could help repay the loan most efficiently. Student dents should be educated in how much they are paying in interest and how to avoid falling behind. Once as student receives the loan they are given a certain amount of time to repay the loan, generally six months after graduation. Once that is completed, they will be required to make payment. What lenders don’t tell them is that there are options for them such as Income Based Repayment programs, Disability discharge and Public Service Loan Forgiveness. These programs offer affordable payments that may also allow for shorter loan