As discussed in the previous post, you can get into some legal problems and financial issues if you do not pay back your student loan. Of course, circumstances always come into play, and the law and judges do consider your unique situation before they make a judgment on such matters.
If your case is going to court such as being sued from a private lending institution, you will have to agree to work out payment, or they could take some of the things that you own and could even freeze bank accounts in some cases or garnish your wages. Civil actions are not criminal charges, but they can put a financial and legal strain on your life having to hire lawyers to represent you. There is also a lot of paperwork involved and so forth.
Federal loans, unlike private loans, carry a stricter penalty for not paying them back. They’re usually much larger loans because the federal government supposedly has more money to spend, but they also hold you responsible until it is all paid back.
There are cases when people can get student loan forgiveness later if they run into serious financial problems, health issues, and so forth. Whatever the situation, you’re responsible for every penny you borrow, and the federal government does have legal recourse to file a criminal action against you for failure to pay back Federal monies.
This may sound scary but a lot of people do borrow Federal student loans and have trouble paying them back. The government realizes this and they try to work with former students of state institutions much like the IRS do if you get into trouble.
The issue is always centered on what you are doing to pay back money that you owe. They will usually work with you and work out a plan. President Trump has recently learned how massive the overall student debt is in the country and he is working on a project right now that would allow some student loan to be forgiven provided students start paying back what they owe.
There are thousands of people who owe a significant amount on their student loans that they took out years ago and President Trump is trying to formulate a plan to get Congress to pass this law that would help college students greatly to lessen the burden of their loans.
We’ll see how that comes out. In the meantime don’t take out more than you can pay back based on a salary you prognosticate that you’ll make once you finish your college training.
Remember that wealth is what you have when debts are subtracted from your actual income and assets. If you have anything left barely because of the large amount of your student loan you have nothing. Think carefully because it is better to owe a little and have a smaller degree or training certificate that can make you money than a huge amount of money that you will never pay back and a career that does not pay well enough to justify the debt.