As many people with student loans understand from firsthand experience, paying off student debt is extremely difficult in certain situations. Many student loan borrowers need to fork over an insane amount of money every month to make payments, and a substantial minority of borrowers have more than six figures of student loan debt. Unless borrowers enter certain fields and earn enough money, it can be nearly impossible to pay off student loans along with other living costs. When faced with such challenges, it might be easy to wonder if you should ever give up paying off student loans.
Since starting Student Debt Diaries over two years ago, I have communicated with hundreds of people from all different types of financial backgrounds. Many people who contact me are in dire financial straits, and some have considered whether they should give up paying off student loans altogether. However, from my own experience, it almost never makes sense to give up paying off student loans.
As many people already know, there are substantial and long-lasting consequences for failing to make payments on student debt. Not paying your student loans will affect your credit, which could make it harder to buy a home, rent an apartment, open a credit card, or achieve a number of financial goals. In addition, many professions look to financial records before deciding to license applicants, and it is common for individuals to be denied law licenses, security clearances, and similar credentials because of their financial history.
In addition, if you currently have a professional license, and fail to pay off student loans, you can have your license revoked. Indeed, laws in many states allow authorities to suspend law licenses and other credentials if student loan payments are not made. The reasoning behind such laws is that professionals borrowed money to obtain such credentials, and so it is fair to have the credential suspended until student loan accounts are in good standing.
Furthermore, being hounded by creditors is not fun. Although there are laws on the books that restrict the methods of creditors in collecting unpaid money, being hounded for cash is not a pleasant experience. Several members of my family have faced financial difficulties at different points in their lives, and I have seen the efforts of creditors firsthand. They often call incessantly, send threatening letters, and pursue other tactics that are extremely unpleasant to most people.
In addition, if you have money, and simply do not want to devote these funds to student debt repayment, the money may not be safe from creditors. Although it takes some work, creditors can reach funds in bank accounts, and can put liens on property under the right circumstances. In addition, in certain situations, creditors can garnish wages, which is a very embarrassing and troubling situation. All of these difficulties should give anyone pause if they think it would be an okay idea to give up paying off student loans.
Moreover, repaying student loans does not need to be a hopeless endeavor for almost all student debt borrowers. Even if you have a ton of high-interest debt, it is possible to pay off student loans. As my story demonstrates, it is possible to save money in order to devote hundreds of dollars extra to your student loans each month. In addition, you can also work part-time jobs so that you can devote additional money to student loans without greatly impacting your bottom line.
Furthermore, programs exist that can make it unnecessary to give up paying off student loans. Many graduates are eligible for income-driven repayment plans. Under such plans, graduates only have to devote a certain percentage of their income each month to student loans, and after a set period of time, the balance of the debt is forgiven. If you are eligible for such programs, paying of student debt does not have to be an overly onerous responsibility, since your payment amount is pegged to your income.
In addition, you should try not to give up paying off student loans, since repaying student debt is an extremely satisfying accomplishment. Paying off student debt shows that you are committed and fulfill all of your responsibilities. It is difficult to describe the satisfaction that can be felt from repaying student loans, and people should strive to repay student loans to achieve a worthy goal.
Moreover, repaying student loans is not only satisfying personally, but the process of repaying student loans can be enriching in its own right. While paying off student loans, I learned how to be more disciplined and focused on a goal. I also learned how to sacrifice, get by with less, and be singularly committed to accomplishing a set objective. Repaying student loans is a part of my personal identity and my life story, and the process of repaying student debt truly made me the person that I am today. I would not trade this for anything, and the crucible of debt repayment can have a number of benefits to student debt borrowers.
In the end, student loan repayment is a difficult process for many borrowers, and it might be easy to throw up your hands and give up paying off student loans. However, there can be a number of consequences to not paying off student debt. In addition, the process of repaying debt can make you a better person and have a lasting and positive impact on your life.