I recently read that student loan debt is rising in America. No big surprise since I am seeing the same thing in all of my financial counseling appointments!
There are two facts I want you to know about student loan debt.
- It WILL come due some day
- You can not bankrupt on student loan debt
Yes, student loans will come due one day. I financed my undergraduate degree. I was able to pay some of it as I went along, but I still left Purdue University with nearly $20,000 in debt. It took me 8.5 years to pay it back. Do you want to pay payments on your education for 8.5 years or more?
You can not bankrupt on student loan debt. There are two things that are non-bankruptable – taxes and student loans. So if your plan was to go get a degree and then declare bankruptcy, you have a VERY BAD PLAN!
The median student loan debt of graduating bachelor degree recipients in 2004 was $19,300 according to the College Board.
Are your children going to have to finance their education as well? If so, it will likely set back your child 5-10 years in achieving debt freedom.
I resolve to provide my daughter a paid-for college education and set her up to start out life with ZERO debt. Life is just so much more fun when you are debt-free!