Student loans impact the financial future of both the individual students and the university. For students, student loans mean entering into a competitive job market with debt, which can be difficult to overcome. When students are unable to pay back their student loans, it is recommended they discuss their financial situation with a student loan debt attorney. While it is ultimately the individual who faces the burden of student loan debt, universities that consistently graduate students with debt they simply cannot pay face serious consequences to their reputation and finances.
The Department of Education has implemented measures to encourage universities to lower their rates of defaulted student loans by offering manageable financial packages and long term finance counseling to students. The Department of Education reports every college’s default rate online, and encourages future students to consider anything above 10% three-year default rates a red flag to avoid. In addition, for universities with a 40% three-year default rate, the Department of Education designates them as ineligible for federal loans.
When analyzing the impact of student loans on our economy, it is important to engage both the individual and institutional affects. Universities face negative consequences to their reputation, status, and federal loan access when their graduates consistently default on student loan debt because they are unable to make payments.
These universities are held somewhat accountable to their overall rates of defaulted student loans because the Department of Education believes that institutions have a responsibility to protect their graduates from exorbitant student loan debt. If you find yourself in a position where you are unable to make payments on your student loans, contact a bankruptcy attorney to find out how to minimize your debt.