“New data shows that 11.3 percent of student loans were delinquent at the end of 2014–double the rate just 10 years ago.”
Today many students graduate with substantial student loan debt and struggle to make payments–especially when they are just entering the workforce. While tempting to default on students loans, there are serious long-term consequences. For example
- Your credit score will tank once your payment is 45-90 days late.
- You could wind up in default after 270 days, and the lender can ask for the unpaid balance in full and your account could be given to a collection agency.
- If you default on federal loan payments, Uncle Sam can take your tax return.
- The federal government can take up to 15 percent of your wages if you default on student loans.
- If someone consigned your loan, they also suffer the consequences for late payments or a default.
For someone who has fallen behind on student loan payments, the article also provides suggestions that can help get back on track.
For more information, click here.
Teaching Suggestions
You may want to use the information in this blog post and the original article to
- Stress the importance of making student loan payments on time.
- Discuss the consequences of missing payments or defaulting on a student loan.
Discussion Questions
- Why is it important to make student loan payments on time?
- What are the consequences of defaulting on a student loan?
- Assume you are behind on your student loan payments. What steps can you take to find the money needed to make student loan payments and eventually pay off a student loan?
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