Educating Yourself About Student Loan Repayment

Do you know that silly game that some children like, where they give you a choice between two unacceptable (usually gross) things, and then ask you which you would rather have if you had have one? Here's one they would appreciate: which is these two problems would you rather be caught stuck in - a situation where you haven't paid your taxes properly and the IRS is mad at you or a situation where you haven't paid your student loan installment and you're waiting for someone to come down heavily on you? Surprisingly, the wrath of the IRS is something you should prefer any day to what can happen to you if you default on your student loan repayment.

To begin with, you can only owe to the IRS taxes on what you actually make. With your student loans on the other hand though, you can take out $100,000 in loans as a student, hoping that you make it big on the other end. And then, you could discover that your profession of choice craters and there are no good jobs. Law school graduates, having paid big bucks for their degrees, are discovering that legal firms no longer pay the $200,000-a-year salaries that they used to. $50,000 a year would be more realistic.

Americans now owe more in student loans than they do in credit card debt. What makes student debt loans worse than credit card debt is this: when a person finds himself unable to pay his credit card obligations, can get out of it by declaring bankruptcy. There is nothing he can do to get himself out of the crushing burden of unpaid student loans. They are his for life. They'll take it out of his Social Security benefits if they have to.

When students take out $1000 loans or something like it, they just believe that it's worth it because they are investing in their future. They have no idea what they're doing to the future though. In many cases, people sign up for 30-year student loan repayment terms. When their children are ready to go to college, they'll still be paying their student debt loans down. Can you imagine what it would do to a parent considering a student loan for his child if he is paying his own student debt loans down? He would be far less willing to take out a generous loan. Your student loan today easily affects your child's future.

Young people, before they pick a student loan, need to take a good long look at what exactly they can expect to make when they graduate. They should never borrow more than they can afford to repay on the kind of salary they will make their first year. Sadly, there are young people spending big bucks to major in subjects like sociology or Middle English literature. What are the chances that one can make a decent enough salary with skills like these?

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