Student loan debt is a massive crisis hitting the United States. Currently, 44 million Americans owe over $1.53 trillion and climbing. These numbers are expected to rise later this year when the new numbers are released. That much debt is forcing people to put off major life decisions, simply because they cannot afford their debt payments and other types of spending.
For example, many people in their 20s and 30s are waiting to get married and have kids. They’re not buying homes or vehicles. It’s easy to make fun of the millennial who still lives at home, but they have a good economic reason. They simply can’t afford to pay their monthly student loan debt bill and rent and all the other expenses that come with living on your own.
Putting off these ‘rites of passage’ are coming at a major cost to the economy as well. We have a growing generation of people who leave college and cannot find a decent job. As college enrollment drops, many are starting to wonder if going to college is worth it at all. It is a great long-term investment, but in the short-term, you’re probably going to feel the heat.
Sadly, many Americans feel the sting too strongly. They leave college and have six months to find a job and get on their feet. They call this the ‘grace period’ that gives students a little bit of time. But, whether you’re ready or not, after that six months, that first bill will come in. You might be able to get a deferment, but deferments only make your principal total grow as interest continues to be added.
Leaving the Country
CNBC recently reported about some Americans being in such a tight spot that they decide to leave the U.S. to escape the wrath of their student loan debt. One guy in particular moved to India. Living in Colorado was expensive and the jobs weren’t available. Imagine spending many years and racking up tens of thousands of dollars in debt for a degree that doesn’t do anything for you. That’s the desperation this man felt. He left for India to escape it all.
While there’s no official data on how many former students have left the United States due to student loan debt, there’s many people out there. In particular there are Reddit channels and groups all over social media that tell the story of people running as far from the U.S. as possible to escape their debt.
A lot of that has to do with the backlash of not being able to pay your debt. As stated earlier, they will come after you whether you’re ready or not. If you can’t pay, they will garnish your wages, steal your tax refund, and even harass you. Many students were often lied to and became victims of their debtors who purposefully gave them wrong information to keep them from seeking any type of student loan help or assistance.
One person told her story of how she left for Japan. She was working multiple jobs to pay off your debt, but it was weighing her down in every way. As long as she had a lot of debt, she was unable to pay for health insurance, which is another part of this problem. “I wish I could come back to America and not be scared,” she said.
A Lot of Debt
Out of all the other types of household debt, student loans seem to be the hardest to pay off. The 90-day delinquency rate is much higher than all other forms of debt. It’s even predicted that 40% of all student loans will be defaulted on in the next 5 or so years. That’s a lot of people not paying their bills! Because of that, the amount of student loan debt is expected to skyrocket.
While the White House currently has no plans to help out students, many Democratic presidential candidates have made this crisis a top priority in their campaigns. Candidates like Bernie Sanders and Elizabeth Warren have promised to tackle the issue. Most of the candidates appear to be in favor of free college education and wiping out the $1.53 trillion already owed.
