The majority of students have to take out loans to go to college. Unlike other countries, the United States does not have tuition-free education at the university level, so tuition is a major financial investment. Naturally, many 18-year-olds have little income and savings, so they use loans to get a degree.
In an ideal world, these students would then get jobs and use their new, higher salaries to pay back their loans. Unfortunately, things do not always work out that smoothly. How many students fail to pay their loans back after signing on the dotted line?
Sources vary on the exact percentage
You can find different statistics from different studies, but all of them suggest that billions will not get repaid. For instance, one 2020 report in Forbes said that about 7% of those who borrowed money will never pay it off. While 7% may sound small, you’re talking about $1.5 trillion in national debt, so it is indeed a significant amount.
A CNBC report paints a dire picture, even for those who have tried to pay off their loans. It indicates that about three out of every 10 borrowers will fall behind in just six years and be unable to keep paying. So, even if the number of people who never pay anything is small, there are still around a third of borrowers who will eventually stop paying before the loans have been entirely paid off.
What can you do if you provided these loans?
This can be very concerning to you if you run a company that finances student loans. What can you do to collect on what is owed? Be sure you know your legal options.
