If You Thought You Could, Should You Boycott Your Student Loans?
Since March 2020, student loan borrowers have had the luxury of deferring their payments on student loan debt. Now, nearly 3 ½ years later, those payments are due to start back up again this October. The media is flooded with stories about borrowers not being able to make the payments due to the failure of politicians to forgive a good chunk of that debt. As a result, this is a powder keg that is about to blow.
I saw an alarming survey provided by www.intelligent.com that provides the match to that powder keg. The headline survey result:
62% of those surveyed plan on boycotting their student loan payments.
What makes this rebellious reaction even worse comes from the wisdom of President Biden. Biden felt like borrowers needed an “on-ramp” to get started again. The Department of Education is giving students a year where it is okay if they miss their student loan payments because there would be no negative consequences for missing those payments for the following year. Extending the deferral (which is what they are doing) for a year just adds to the powder keg, and here is why.
The student loan borrower who is going to intentionally boycott for a year will not feel the consequences, which could go a long way to justify their actions. Then, once that year is up, things will automatically get real. Chances are, they will be ignoring anything in the mail at that point. For 12 months, that fuse is lit, and in month 15 or so, that powder keg is going to explode.
So, please hear me out. For whatever reason you think it is justified to boycott, please reconsider. The consequences for defaulting on student loan debt are more severe than any other debt beyond IRS debt. You can’t discharge it in bankruptcy. They can garnish your wages. Plus, the interest rates on the debt climb to unimaginable levels. It goes without saying that it will trash your credit files. That is just for starters. The bottom line is just pay it back no matter the cost and stay in good standing with the government.
If you need lower payments or want to know how to get a portion of that debt forgiven, call your loan servicer. They can be a tremendous help.
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