Facing Student Loan Debt? You're Not Alone
In case you haven’t heard the most recent figure, student loan debt totals across the U.S. are at an all time high, reaching $1.2 trillion recently, and the impact on the economy at large is starting to make itself known. And the problem comes down to very something very straightforward – how is a newly minted graduate who enters the job market supposed to deal with between $30,000 and $100,000 in debt?
Although the unemployment numbers of late have looked pretty solid, carrying more debt than a starting salary, in many cases, becomes a recipe for disaster no matter how you look at it. According to a recent article, executive director and co-founder of StudentDebtCrisis.org, Natalia Abrams, was quoted as saying, “People cannot participate in the American dream because of student debt.”
Painful Truths About Major Life Issues
Many people in the job market look at their student loan debt as a problem that takes time and energy to deal with. Sure, you have your job and your paycheck, and like most people, you go to work and then pay your bills. But it’s not that simple. Getting married, buying a home, starting a family – the cornerstones of the classic American Dream – are compromised, as people in their twenties redirect precious attention to tackling out-of-control monthly student loan payments, at the expense of saving and building for their futures.
And with many students facing more than $100,000 in student loan debt, monthly payments often amount to more than $1,000 – as much or more than what they might be spending on their apartment rent. Once a young person pencils out the numbers, there’s little left over to begin a savings account, an investment account, or to begin planning for retirement, let alone buying their first home.
The IRS isn’t helping the situation much, either, as many people find out once they’re married. While single, graduates have the ability to write off student loan interest as a yearly deduction. But try claiming those same tax deductions on qualified student loans when you’re married and decide to file separately from your spouse, and you’re in for a big surprise. In a word, you simply can’t claim the tax deduction in this scenario.
So What Can You Do to Survive Student Loan Debt?
There are answers out there, of course, and most of them focus on student loan debt consolidation. For anyone considering consolidating existing student loan debt, careful research should be the first step, because there are plenty of places to make costly mistakes. For instance, did you know that consolidating federal student loans with a private lender could be a very unwise idea?
With so much information to consider, it’s wise for anyone who is interested in student loan debt consolidation to consult with a qualified student loan professional, before making any moves.
[Photo Credit: Mint]
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