The issue of student loan debt is continuing to make news, but little is being done to prevent an obvious bubble from bursting. Students all over the country are struggling to make ends meet, pay rent, and have enough to eat due to the sheer size of their student loan debt.
Now, students aren’t the only ones suffering from huge debt. Many parents of children who have taken out student loans are using their retirement accounts and life savings to help their children get out from under the crushing weight of thousands of dollars of debt.
Many more are watching their credit scores plummet while avoiding creditor harassment calls because they are cosigners on their child’s unpaid student loan debt. The problem is quickly spreading.
According to a recent survey by Discover, 6 in 10 parents say that they are planning on helping their kids pay off student loans after graduation, and 8 out of 10 say they’re very worried about the negative impact that student loan debt will have on their child’s life.
Some parents believe that student loan debt is a shared burden that they feel obligated to help pay off, while other say they just can’t let student debt hinder their child. Whatever reason they give, parents could be putting their own futures on the line in order to help clear the way for their children.
According to data collected by the TransAmerica Center in 2015, people who are in their 40s have an average savings of about $63,000. Those in their 50s have approximately $117,000. If that seems like a lot, remember that most financial experts recommend people have more than double that amount by their age. At 40, experts suggest a savings of $150,000, and $300,000 at 50.
Those numbers are hard to hit on their own, but now with so many parents using their money and savings to help pay huge student debt payments, the amount people will have saved for retirement will be miniscule at best.
Eventually, every parent will have to either work until the day they die, or will just have to keep their fingers crossed that their children will provide for them in the future.
However, with the student loan bubble growing, America may be looking at another recession when it bursts. This may leave those same children unable to support their parents, putting them in a horrible situation.
Something has to be done about student loan debt and the inevitable bubble burst. What do you think can be done? Is it too late already?
What Can I Do About Student Loan Debt?
Depending on your situation, Chapter 7 bankruptcy may be able to help you, either by proving undue hardship and discharging the student debt, or by discharging other debts, therefore freeing up income to pay off student loans.
There may also be opportunity to negotiate with the creditor. Many creditors are willing to work with the borrower to revise the principle amount or make payments smaller.
Every case is different, and some solutions may not work for everyone. Talk with a bankruptcy attorney about other options that may be available to you.
The Law Firm of Kevin D. Judd is here to help you achieve your goal of becoming free from financial burden so that you can live the life you want.