According to the Federal Reserve, student loan debt is the only
form of consumer debt that has grown since the peak of consumer debt in
2008. The latest Fed reports states, “Balances of student loans have
eclipsed both auto loans and credit cards, making student loan debt the
largest form of consumer debt outside of mortgages.” The Fed keeps an
eye on these numbers to determine their impact on the nation’s overall
economic growth.
On an individual level, most student loan holders are well aware of
the direct impact on their lifestyle. A significant portion of
their income has to be allocated toward student loan debt payments. That
means less money for other expenses like mortgages, automobiles and
daily living. Since lenders consider debt/income ratios, borrowers with
high student loan debt may be denied loans or face higher interest
rates.
Student loan debt does not magically go away. So, the best strategy
is to take action. Find out exactly how much you owe and the type
of loan – federal or private. You can retrieve information about federal
student loans at www.nslds.ed.gov
. In the case of federal student loans there are many types of
repayment options. A repayment and comparison calculator to help you
analyze those options is available at www. studentaid.gov . If
you are employed in the public sector investigate the Public Student
Loan Forgiveness program. Try to avoid delinquencies and default. These
options can be costly and can lead to wage or other types of
garnishments.
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