Student Loan Default – What Can Happen?
There are people that say defaulting on a student loan is no big problem, that students don’t need to really worry about it. Unfortunately, those people are completely and utterly wrong. Trying to pay off student loans is a tricky business, and the failure to do so can lead to some very unpleasant circumstances. In order to collect their money, guarantors can report the student who defaulted to all national credit bureaus, get rid of tax refunds, prevent any additional financial aid, sue the student, and much, much more. For all of these reasons, getting help with student loan repayment is enormously beneficial to each and every student. In many states, almost half of America, a student loan default, in which student does make payments for 270 days, can lead to the loss of personal certification and licenses, including professional and driver’s licenses. The statues set in those states can ruin the lives of students, as various examples from around the country can attest to. Everyone has heard of the students who spend half of their careers just trying to pay off their loans, and nobody wants to be that person.
The following states can legally suspend the driver’s licenses of students that default their loans:
There are twenty-two states in total, and students in those states especially should get help with student loan repayment. The state legislatures of Montana and Iowa are currently considering bills which could repeal the laws allowing for suspension of driver’s licenses, but even if those succeed, there will still be twenty other states with such laws in place.
The advocates of the repeal argue that taking away licenses is ineffective and places students in more debt because they can’t travel to work. Losing a driver’s license will have a real impact in “taking away their ability to eventually pay it back,” according to Montana State Representative Moffie Funk, who sponsored the bill. He also added that the current statutes are “punitive and so demeaning.” In states such as Montana where there is very little public transportation available, the loss of a driver’s license can be especially catastrophic.
A student loan default will completely trash any credit the student has, and loans will continue to gather interest for however long they are unpaid. Therefore, it will become harder and harder to repay the debt. It’s best to pay off the loans as soon as possible, but that can be difficult to do all by oneself. That’s why many students look for help with student loan repayment. Student loans also generally cannot be discharged even in the case of bankruptcy and the loss of credit will be devastating to anyone, student or otherwise. Students living in any one of those twenty-two states are at risk of losing their entire life to a single default. Luckily, students don’t need to be alone in paying off their loans. Student Loan Guidance Group is here to help with student loan repayment options and helping find the best available options for those in this very situation.