How much student loan debt is in the U.S.? The answer might surprise you. Outstanding student loan debt (including both federal and private student loans) currently stands at around $1.814 trillion. This makes it even greater than the country’s total credit card debt.
If you have outstanding student loans, you’re not alone. Managing student debt (or any kind of debt, for that matter) can be difficult, but it helps tremendously to be informed. With that in mind, take a look at these three surprising facts, which just might change your outlook on your situation.
Your Social Security Payments Can Be Garnished
Private debt collectors generally can’t garnish disability or Social Security benefits. However, federal student loan debt collectors operate differently. If you default on your federal student loans and you receive Social Security benefits, the federal government may collect 15% of your benefits above $750.
This is known as a “Social Security offset.” The government also uses tax refund offsets to seize the refunds of people who have defaulted on federal loans.
Bankruptcy Usually Can’t Help
Many people facing Social Security offsets think they can get their student loan debt discharged through Chapter 7 bankruptcy. Unfortunately, this is very rarely true.
When you declare Chapter 7 bankruptcy, most of your unsecured debts (like credit card and medical debts) will be discharged. However, this is almost never the case for student loans. To have your student loan debt discharged, you or your bankruptcy lawyer must convince the court that you’re suffering extreme financial hardship.
You Can Get Student Loans Forgiven
How many Americans have student loan debt? Recent student loan debt statistics indicate that almost 43 million people (about one in six adults in the U.S.) owe money on student loans. The next logical question is what is the current average student loan debt among those borrowers? Currently, it’s about $40,000.
Thanks to the power of compounding interest, even seemingly manageable student loans can snowball into balances greater than what you originally owed. However, if you’re wondering how to get out of student loan debt, you’ll be intrigued to learn that you may be able to have your loans forgiven.
Who qualifies for student loan debt forgiveness, exactly? There are several different programs available, each with its own eligibility criteria.
National Health Service Corps (NHSC) Loan Repayment Program
If you’re a doctor or other medical professional, you could have a significant portion of your student loan debt wiped out in exchange for working in a health professional shortage area (HPSA) for two years.
Primary care physicians receive the greatest amount of assistance, but healthcare professionals from many different specialties are accepted.
Nurse Corps Loan Repayment Program
This program will pay up to 85% of unpaid nursing education debt for nurses who work in an underserved area for two years.
Teacher Loan Forgiveness
If you’re a teacher who agrees to teach at an approved low-income school for five years, you could have up to $17,500 of your student loan debt forgiven.
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness (PSLF) program is one of the most popular forms of student loan debt relief. If you work for an approved nonprofit or government agency for 10 years and make 10 years of student loan payments, the remainder of your balance may be forgiven.
Volunteer Program Loan Forgiveness
If you volunteer for the Peace Corps or AmeriCorps, you can get as much as 70% of your federal Perkins Loan debt canceled after four years of service.
When It Comes to Student Loans, You Have Options
If you have outstanding student loans, debt might start to feel like a permanent reality after a while. However, it’s important to remember that you have options. When you take a proactive approach to student loan debt, look for helpful opportunities, and make your payments on time, you’ll be well on your way to becoming debt-free.
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