According to the analysis and report from the American think-tank, it stated clearly that consumers under the age of 34 own a total of over $620 billion as a result of student loans in mid-2019. This is never a good grade to aspire for, but it many students have bought into it because they don’t have experience with money and would take out more than they need. So, therefore, each student should be able to match their expenses with how much they need to borrow.
There are lots of areas of your life that will be affected by default just by carrying student debt. Such as saving for retirements other than buying a home. You may be thinking that student debts are forgiven under certain circumstances but it is also clear that it may not be considered in case of default.
Another scenario comes in when co-signers cosign a student debt, it makes them responsible for the loans if the primary borrower defaults.
You should also not fail to ask yourself when students necessarily need to take out loans. A good reason should be that it is taking out to pay off for the full cost of their education. In that midst of reasons, you should draw a line of management. Mismanaging money especially loans can shift the purpose and still put bills on your head without accomplishing the initial target.
See below the reasons why loan debt can affect your life negatively:
Cause you to forsake Grad School
As simple as the debt can be, it can cause you to lose or hinder you from attending graduate school. Imagine an undergraduate accumulating $30,000 in student loan debt. It is certainly impossible for students leaving the undergraduate program with such amount to take out another lump of loan to further professional program.
Capacity to Afford Buying A Home is limited
With such an outstanding debt, you won’t have all it takes to purchase a home. It really needs extra income and energy to be able to manage them together. But the majority cannot afford even though they receive monthly payments. Now for you to put down money for a home. And also for the student loan debt, you have minimum chances of surviving.
You are handicapped to Living at Home
Because you can’t afford to purchase a home. Rent apartment will always be what you look up to for shelter. Because the capacity to buy a home is no longer there merely looking at your credit score. It thus goes far according to Zillow’s analysis. That young aged adults within 23 to 37. Have always lived with their parents. This was stated in 2019.
It is unfortunate that most of these young adults aren’t leaving the nest. Because they don’t make enough money to pay back their student loans and also pay rent.
You might not be able to pursue your dreams
Student loan debt will cause you more than your financial independence and standard living. It drastically drifts their dreams of living to pay off the debt they own instead of dreams and accomplishments. This definitely makes you live your dreams and running another vision whereby your focus is on making sure you are clear the debt without focusing on your dreams. It will cost months or even years to return back to what you had as your dream.
It can cost you your job or a job you aspire
You may be disqualified for a job if it happens to be a company that often conducts background checks such as your credit checks. And 34% of companies would be conducting credit checks on some job applicants. So whenever you have student loan debt in your record, bear in mind that prospective employers might hold it against you when seeking for a job on their company.