There is an old joke that the basis of a loan is predicated on a mutual misunderstanding of assumption by two parties. The person granting the loan assumes it will be paid back in a timely manner. Meanwhile, the person accepting the loan assumes they can pay it back. And no greater assumption about debt is ever made than when it comes to student loan debt. Or rather, unpaid student loan debt.
The subject of student loan debt has been the crux of sitcom plots and the subject matter for comedians. But it is no laughing matter.
About 45 million Americans collectively owe $1.6 trillion in unpaid student loan debt. The average student owes about $29,200.
In an economy where almost 60 million Americans applied for unemployment since March 2020, student loan debt may be the biggest legacy bequeathed on students for generations.
Not paying back your student debts can mean catastrophic consequences for your financial future.
Unpaid student loan debt can also irreparably destroy familial relations.
But can unpaid student loan debt land you in jail?
No.
Student loan debt is considered a civil debt. You can’t be arrested for not repaying your student debt.
Still, not repaying your student loan debt is not the way to go.
Lawsuits Over Unpaid Student Loan Debt
You could be sued for your unpaid student loan debts.
Your salary could be garnished to repay your student debt, depending on what you owe.
The average person pays about $382 monthly for a decade to pay off an unpaid student loan debt.
You would have to make at least $47,000 annually as a single person to accomplish this.
The average American only makes $48,000 annually.
Remember how I said you couldn’t be arrested for not repaying your unpaid student loan debt?
If you’re ordered to appear in court after being sued for your student loan debt, and don’t appear, you can be arrested.
Debt Collection Harassment
Your unpaid student loan debt could be sold to a third-party debt collection service.
Debt collectors may harass and harangue you with incessant text messages, calls, and contact you on your social media websites.
The personal information that you supplied to get your student loan could be given to debt collectors to empower their activities.
Not paying back your unpaid student loan debt puts you in the wrong.
That doesn’t mean you deserve to be harassed.
If you are being viciously harassed by debt collectors, you can file a complaint with:
- Your State Attorney General’s office
- The Federal Trade Commission
- The Consumer Financial Protection Bureau
Years of Debt Collection Harassment
Did you know that there is a statute of limitations regarding debt collection?
Depending on you where you live debt collectors may only have 3 to 10 years to recover a debt.
Debt collectors also have that much time to file a lawsuit against you to recover a debt.
Statute of limitations regarding debt collection should not be considered a get-out-of-jail-free card.
The amount of years you may have for such statutes depends on where you live and the kind of debt you owe.
If you can deal with harassing debt collectors and potential lawsuits for a few years, you might dodge repayment.
You can’t be arrested for unpaid student loan debt, but you might feel like you’re in jail if you don’t repay it.
You, or possibly your relatives.
Grandparents With Student Loan Debt
Many parents, and grandparents, wholly assume student loan debt as co-borrowers for the sake of children and grandchildren.
So, many grandparents are assuming the consequences of unpaid student debt.
People over the age of 50 account for almost $290 billion of all outstanding unpaid student loan debt.
No, you won’t go to jail over unpaid student loan debt.
But you and your relatives can still face severe consequences over it
Pay Your Debts
Student loan debt may be an unavoidable option for many.
You assumed it, so you should endeavor to pay it off.
If you are in the process of selecting a college or university, attend one in state and commute. You will pay more for room and board and tuition at expensive out-of-state school.
Understand the financial consequences of your grandparents and relatives co-signing your debt as co-borrowers.
Assuming a debt means knowing you must pay it back at some point. You don’t have to worry about jail when it comes to unpaid student debt.
Still, non-payment can be a very unpleasant experience.
Read More
EVICTIONS ARE ON THE RISE – HERE ARE SOME OPTIONS
THESE DOLLAR STORE ITEMS ARE A WASTE OF MONEY
BARBADOS LETTING FOREIGNERS LIVE AND TELECOMMUTE THERE FOR A YEAR
4 ITEMS THAT ARE NOT WORTH YOUR CASH
Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.