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Delinquencies and defaults on student loans are not only damaging to credit; they can lead to collections lawsuits, interception of tax refunds, wage garnishments, and more.
If you are a student loan borrower worried about strained finances, remember that it is important to take every step possible to avoid defaulting. While you may hear of some borrowers letting their loans ‘go,’ be aware that there are many serious repercussions.
As student loans burden over 44 million borrowers today and affect the economy of the nation overall, both graduates and non-graduates alike are struggling to the point of national concern.
Delinquencies and defaults on student loans have risen past 11 percent, even with the availability of alternative repayment programs.
Defaults on student loans can have severe repercussions for borrowers of any age. Private servicers may sue upon default, while the federal government may garnish wages or intercept tax refunds.
Recent studies show that while younger generations and millennials are having a difficult time with the burden of student loans, so are other age groups like Gen X’ers and Baby Boomers. The student loan crisis is even making an impact on retirement plans.
With interest rates jumping, student loan borrowers are often stretched too thin, both mentally and financially. This is resulting in financial constraints that affect the economy at large, as they are unable to spend on large items like homes and cars.
Sued by both the Justice Department and more recently the Consumer Financial Protection Bureau (CFPB), Navient administrators have said that they will fight back against these lawsuits.
It has been clear for some time now that more women are attending college than men, so it makes sense that they would be contributing more to tuition costs; however, recent studies point out that student loan debt is becoming a women’s issue.