A lot is heard about student loan debt and the consequences of not repaying these loans. As you know, not much can be expected from students, given their age and experience. A parental guidance is sure to help students make a right choice, provided they have enough experience in money matters.

School Loan Debt Trapped

How do students opt for student loan schemes? What exactly is the problem about their understanding of the student/ school loan programs? Where do they go wrong or what brings their repayments process to a standstill? What kind of push do they need? I am sure you will have loads of questions coming up in your mind.

We have the case study of Stefan Heise a college graduate who ended up filing bankruptcy, due to his inability to pay back his student loan debt of $84,000. This is a small documentary film about how college graduates end up earning very meager amount which are just not sufficient to meet their day to day living expenses.

An aspiring student Stefan Heise took up college education without ay financial support and managed to pay his school fees with the help of student loans and credit card payment. He had to juggle with the various credit cards to meet his living expenses and sometimes every the rent for his accommodation.

He admits that it was only with the help of cash advances offered by credit card companies did he ever move to New York. He in fact deferred his student loans in order to be able to complete his credit card debt. Stefan 34 lost all hopes of being able to pay back the money he had borrowed over a period of time through his credit cards. And the real test began when he was unable to pay his credit card installments. The interest rates started shooting up exorbitantly that it rose from three percent to nine percentage, soon after he missed paying installments.

What more can you expect from an intern with a service organization making just about $16,000 per annum. Eventually his debit card was blocked and saving account freezed. With no money to pay, he resorted to bankruptcy. His bankruptcy hearing was over and his credit card debt to the extent of $21,000 was dismissed. Now all Stefan had was a student loan of about $ 63,000. I am sure you know that student loans will not be dismissed even after filing bankruptcy.

Beware of School Loan Debt

This is not the case only with Stefan, but with thousands of students whose willingness to complete graduation has cost them their lifetime. Further to this, statistics reveals that the earning levels of graduates have been almost flat ever since 1975. While women graduates saw a 10% increase in their earning level, it was a clear indication that even after completing their education, their earnings never matched their debt, consequently falling into the School Loan Debt Trap. Only a wise choice of job offers and academic performance may help them get away with their school or student loan debt liabilities.