Graduation season has put U.S. student loan debt back in the spotlight, even on Capitol Hill.
“The treasury secretary remarked the student debt is hampering our economy across multiple sectors of society, and the federal reserve identified student debt as a risk to aggregate household spending .”
According to a pew research study, about 37 percent of young U.S. households carry student debt and in an uncertain job market, the pressure to pay back can be overwhelming. Brittany Jones told her story to a senate committee.
“The numbers did not add up. I worked as many as three jobs at once just to make the monthly payments.”
In those tough financial situations, skipping payments may seem like the only option, but that short- term decision, can have long-term consequences. A poor credit score can dash hopes of buying a home, a car, and even a chance at certain jobs.
often, lenders can work out a plan that allows for smaller monthly payments.
“The problem here, is that you're paying more money in interest over the life of the loan so you're trading that short-term relief for some long-term pain. Nonetheless, if you can't afford the monthly payments, this might be your only option.”
So if grads have loans with grace periods, they should use it to research every option from repayment plans, to federal loan forgiveness for certain professions like teaching or public service to be prepared when the first bills arrive.