In light of the current financial crises, many banks are starting to turn down students’ requests for loans. In some cases, before a degree is even earned. Without a job and without a degree to, presumably, get a higher paying job, these people are left without a way to repay their debts. And, it gets worse”¦.
Whereas the homeowners who defaulted on their loans were able to declare bankruptcy in many cases, student loans cannot be discharged by bankruptcy. In turn, these young people are left with very few options for repayment and are burdened by a debt that is not going away any time soon. The balance will increase through interest, fees, service charges, etc. until it extinguishes their chances to get a home loan or even find a life partner (i.e. many people would rather not take on a $2,000/month payment just to be married to someone).
In reality, many of these new graduates are left with a singular option ”“ the federal Income-Based Repayment plan, or IBR, if they qualify….
The higher education bubble will pop in 3, 2, 1…