A Reality Check on Student Debt

A Reality Check on Student Debt Summary With the economy at its slowest, a big concern for students is finding a positive solution to their debt problems. Well, the answer lies with debt management solutions.

Student Debt Problems The fact that today’s youth are over-burdened with debt problems is really a matter of concern. They may have more opportunities than previous generations, but the high cost of education has forced many students to go into debt even to attain average-paying jobs. The current unemployment rate is at an all time high, and lucrative jobs are far from reach for most. When it’s tough to meet expenses within a stipulated budget, the last thing students need is to find themselves involved in unpleasant scenarios like wage garnishment or legal actions. Debt management solutions acknowledge the intricacy of student debt and deliver effective results.

Estimation of Educational Expenses Many universities in the U.S. cost more than $30,000 a year (excluding fees and other expenses). Tuition can reach a whopping $40,000 when all expenses are added. That explains why student debt problems rack up at such a startling rate.

The situation with student debt problems is so drastic that many students would consider giving back their education to get out of debt! One student was quoted in the New York Times as saying, "I don’t want to spend the rest of my life slaving away to pay for an education I got for four years and would happily give back."

Time for a Reality Check There is no magic solution for eliminating student debt. If your student debt is too high and you are contemplating declaring bankruptcy because you are unable to pay it off, then here is some bad news: student loans are exempted from bankruptcy. Therefore, a bankruptcy declaration won’t make any difference to your debt amount, it can make your financial situation even worse, and it will have a negative impact on your credit for years. Bankruptcy will also hurt your insurance policies and job prospects. That’s why you won’t find bankruptcy as an option under student debt management solutions.

Student Loan Modification Student debt problems can’t be resolved overnight, but debt management experts suggest certain ways in which to facilitate the payoff process. Student loan modification is one such option. With a loan modification, you enter into a new agreement with your creditors based on negotiations. This will help you pay off your debt, possibly over an extended time period or at a lower interest rate.