Educational debt is currently affecting more than 44 million of us who owe $1.6 trillion total. The burden of educational debt is countrywide and is one of the largest burdens for Americans. There are many reasons why student loans are harming the future of the U.S economy. The top 10 reasons include:
1. Many student loan borrowers are often reluctant to use additional types of credit because they are already drowning in loan payments. This means a decline in lines of credit for everything including mortgages, car loans etc. Although this sounds like a good thing for individuals, not having these lines of credit with interest rates can negatively affect the economy. The more people who have money to take lines of credit to buy a house, a car or even go shopping on their credit card without building too much debt help the economy grow as well as individual companies.
2. Most millennials who have student debt don’t have the money to spend on helping the economy grow. For the most part, the jobs many millennials get do not pay enough to allow them to support themselves as well as have an available budget for spending on things they want, rather than paying bills also only being able to spend on what they need. Being able to pay off their loans or negotiate their loans would give them this ability and the economy would thrive, but unfortunately that is not the case for our economy.
3. Many people with student loans debt are waiting to get married and start a family as well due to the cost of their monthly loan payments. This not only affects how soon people choose to buy a house for their family, but it also affects the childcare market and children’s stores. When consumers don’t need products because they are putting their lives on hold due to debt, it strongly affects the economy over time.
4. Having high amounts of debt also affects the start of new small businesses. As most entrepreneurs know, it takes money to make money in many cases. For many college graduates who have exorbitant payments and for those who owe so much they can’s see an end in sight, taking out more loans or spending large amounts of money is not something they want to do. It is too much of a risk because of their current situation, or they do not have the money/credit to take out a business loan.
If you are one of the many people in trouble because of student loan debt and any other debt in collections, see if there is something you can do! For those who have loans that are not in collections, you can call and try to negotiate a lower payment or deferment due to financial hardship! For federal loans that are in collections, you can call and negotiate a lower payment with the debt collection agency that has your debt. For private loans that are in collections, you can call and negotiate the payoff amount, as well as the monthly payment. There are companies out there that will do this negotiating for you if you don’t feel comfortable making these calls!
Give us a call today for a free consultation! (646) 770-1440