“Unlocking the Hidden Truths: 14 Surprising Realities About Student Loans You Never Knew Existed!”
It’s great if you qualify, but forgiveness isn’t as simple as it sounds. Make sure you fully understand the rules before banking on it as your ultimate repayment strategy.
7. Missing Payments Can Lead to Wage Garnishment
If you default on federal student loans, the government has the power to garnish your wages, tax refunds, and even Social Security benefits. This can happen after 270 days of non-payment, so it’s crucial to stay on top of your loans to avoid falling into default.
The consequences are serious, but you don’t have to deal with it alone. If you’re having trouble, reach out to your loan servicer. They can help you explore options like income-driven plans to help avoid falling behind.
8. Co-Signing Puts Your Finances on the Line
Co-signing a student loan is a big commitment because if the primary borrower can’t pay, you’re responsible. This can affect your own credit score and even your ability to borrow for yourself in the future.
If you’re thinking of co-signing, be sure it’s something you’re comfortable with. Financial stress has a way of impacting relationships, so make sure you go into it with your eyes wide open.
9. Loans Can Affect Your Home-Buying Dreams
Student loan payments are part of your debt-to-income ratio, which mortgage lenders look at when deciding if you qualify. A large student loan payment can make it tougher to secure a mortgage, or it might reduce the amount you qualify for.
