In previous blog posts, we have discussed the consequences of defaulting on student loans. However, the consequences of having student loans are also worth mentioning. In some cases, graduates with high loan balances will have difficulty affording other expenses, such as mortgages.
Some banks have found a connection between the ability to finance a mortgage and having student loan debt. Data released by Goldman Sachs Group, Inc. shows that graduates with balances of $25,000 to $50,000 in student loans were less likely to own a home compared to graduates with less debt. According to the data, the rate of homeownership was 12 percent less for graduates in the $25,000 to $50,000 threshold.
Depending on individual circumstances, graduates now and in the future could have a great deal of difficulty financing a mortgage. The Goldman Sachs report shows that the highest rates of homeownership among college graduates are those with little to no student debt. However, in the last decade, the average amount of student loan debt has grown by 74 percent.
An additional assessment offered by the U.S. Federal Reserve notes that in a nationally representative sample of people between the ages of 29 and 31, in the years 2004-2010, homeownership rates declined for those with student loans.
Can I Discharge Student Loan Debt in Bankruptcy?
Graduates can file for Chapter 7 bankruptcy or Chapter 13 bankruptcy on student loans if a court finds them unable to pay back their student loans now or in the future. By showing evidence that repayment of the loans would impose an undue hardship, it is possible to discharge student loan debt.
Our readers can learn more about undue hardship discharges and student loan bankruptcies by continuing to follow our blog.
The Sader Law Firm – Kansas City Bankruptcy Attorneys