CHARLOTTE, N.C. — You go to college to make a better life for yourself, but, recent numbers show more than one million college graduates in North Carolina are struggling to pay back their loans, even those with good jobs.
The Center for Responsible Lending (CRL) did the study. It found 1.2 million North Carolinians have college debt, they owe a combined $44 billion, and -- the scariest part -- about one-third defaulted.
"Students who still want to go to college, and most of us do because we’ve heard a lot about how that’s sort of the path to the middle class and a better future, are taking on ever-increasing amounts of debt and increasing number of students are taking on student loan debt in order to pursue that dream," CRL's Director of North Carolina Policy Rochelle Sparko said.
And, many times, student debt means putting off major life decisions, like buying a house, saving for retirement or starting a family.
Kassandra Pelton has two degrees: one in science and one in accounting. She told Action 9's Jason Stoogenke she has more than $70,000 in student debt.
She said she has a steady job and unfortunately, steady student loan bills too: about $400 each month.
"I don't have much free money to go spend," Pelton said. "It would be nice to be able to save for things and use that money elsewhere. Ten years ago, I thought by this time, I would have children and a family. I just, I can't afford children."
Most student loans are federal. It usually pays to consolidate. See what the interest rate would be and if it's worth it.
If you want to consolidate, Action 9 doesn't recommend paying a company for help doing it. The government does it for free. But, if you do hire a company, do your research, just like you would any other business.
Then, look at the various repayment plans. Chances are, you're on a 10-year plan with a high monthly payment. Many college graduates don't know there are seven other choices.
If you default on your loan, the good news is it doesn't kick in right away. You still have 270 days to switch to a different repayment option and get back in good standing.
Private loans are less forgiving, you have fewer options and the first time you don't pay, you default.
There's no 270-day grace period.
"They go to school with the expectation that they're going to come, and they're going to make $75,000 a year, or they're going to make 80, and they can actually only get a job making 35 or 40," Cornelius lawyer Christina Collier told Stoogenke.
Collier handles bankruptcies.
If you end up in bankruptcy, most people don't realize you still have to pay back your student loans.
There are exceptions, but they're rare. You have to prove:
- You can't maintain a minimal standard of living based on your expenses
- Your situation isn't likely to change anytime soon
- You've made a good effort to repay your loan
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