This is not the path you want to go down. As limited as your finances may be, completely halting the re-payment process of your student loans will only serve as a detriment to you, as interest will accumulate.
It is reported that slightly more than 22 million people who had received financial aid from the Education Department- the largest federal loan program-are at a point where they’ve already been out of under-graduate/graduate school long enough to where they have surpassed the “grace period” of loan repayment. Only a little more than half of those people, 12.5 million to be exact, are actually making their payments on time.
Not paying back your loans is an imperative issue, so critical that it’s put into various situations. One of these categories being labeled as being in “default”, which currently 4 million americans are in, basically meaning the person has missed at least 9 months of payments. This has severe consequences; that being the government is allowed to take your wages, tax refund, and even Social Security just so they get their funds back. Defaults are the method that is used to record the amount of people actually struggling with their loan repayment. As opposed to those in the default, 2.5 million people who’ve only missed at least a month of the payments, are on the road to a bad credit score, if they keep this up. Another 2.7 million people are in forbearance, a program that allows you to stop making payments on your loans without actually enduring the credit consequences such action may cause. The issue with this, however, is that interest will continue to accumulate. Once you began to make payments again, the amount per designated time period will have increased. 390,000 people have had their payments deferred, for the reason that they may be unemployed or suffering financially, so payments essentially “freeze” until the person is financially able to began again. This method is probably the best way to not make your payments, if it must be put that way, although not being able to pay back your loans for those reasons is still a bad pathway, no matter how you do it.
On a lighter note, a higher percentage of people are at a good standing with their payments as opposed to past years. During April of 2015, 46 percent of people weren’t making payments at all.
The ratio of Americans who either can't or won't make student loan payments on time is a lot higher than people believe. As difficult as being steady on loan repayment may be, it is crucial that you try your hardest to not fall out, because falling out will only hurt you more as time goes by.
By: Lupita Villareal
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