While you may not be drowning in higher education debt, your neighbors probably are, and that’s not great for the economy.
Dianna Ryan is 31 and says that after almost a decade, her $23,000 student debt is finally down to around $5,000.
“Buying a house, I would’ve absolutely loved to do that already,” Ryan said.
While she sees the light at the end of the tunnel, she’s still watching her budget. There’s trips and vacations and outings that you just have to say “no” to.
Attorney Carmen Dellutri, who specializes in bankruptcy in Fort Myers, understands the effects student loans have on the economy.
“You’re choking a whole new wave of educated people, people who should be out buying houses and cars, filtering money through the economy,” Dellutri.
Dellutri sees people drowning in debt on a regular basis.
“If you owe $100,000 on student loans, and you default on them, they can actually charge you up 24 percent or $24,000 and now that’s additional principle,” Dellutri.
And while you may have thought student loans can’t be wiped out in bankruptcy court, that’s not exactly true.
We’ve had a little success,” Dellutri said. “I’m not going to lie. Getting student loans that people thought were non-dischargeable, discharged.”
Dellutri says it comes down to hardship and whether or not the loan is a qualified education loan by definition.
A WINK News survey found many people wish they hadn’t taken out as many loans. Eighty percent of the people said based on their income to debt ratio now, they wouldn’t take on the same loans. It also found almost 50 percent of the people will be paying them off for more than 16 years.
“It gets to the point you pay off all your bills, you feel relieved and you look at your bank account and you’re like, ‘Ok, now were just going to take it easy for the next two weeks until the next one,’ and it’s just a continuous cycle,” Dellutri said.
How can students better understand what they’re signing up for? High schools offer financial nights, so take advantage of them. Know what colleges are in your budget, and research how the loans work.
The survey also found that because of these loans, around 75 percent of the people have put off buying a house or saving for retirement.