When you bring up the issue of student loan debt, which has reached historic proportions in the United States, you will find those who think it is just a problem for the students. They may suggest that they never should have signed on for those loans when they were 18 or that they should find a way to work and pay the money back, just like previous generations did. This mindset puts all of the pressure on the students.
However, the truth is that this is not just an issue that impacts students. It impacts everyone. It has a drastic effect on the economy.
For instance, those same people who act like students should stop complaining about massive debt levels may also complain that young people are not buying homes or cars and supporting the economy. However, the reason they can’t afford these major purchases, as their parents did, is that they have so much debt owed to schools. For instance, one study found that students who were paying off their loans where:
- Less likely to buy new cars using loans
- 36% less likely to get mortgages and buy their own homes
- More likely to still live at home with their parents
- Less likely to have a high credit score
It does hinder the economy when young adults — those in their mid-20s and early 30s — cannot buy homes or cars or make other significant purchases. It means less money moves through the system, workers in these areas lose their jobs and that just increases the percentage of people who can’t make the same purchases. But the issue doesn’t lie with the young people. It lies with the overwhelming debt they already have as soon as they graduate.
Anyone who is facing more debt than they can afford needs to know what options they have. It’s important to note that student loans are only rarely dischargeable in a bankruptcy, but bankruptcy can still help you manage your debts by eliminating other financial obligations. In turn, that can make it easier for you to pay your student loans and still afford the basics.