Amongst the largest issues facing Americans today is student loans. According to the New York Federal Reserve, 44.7 million Americans have student debt, which in total comes out to over a trillion dollars. No, that is not a typo, Americans are in over a trillion dollars worth of debt in the form of student loans, by far more than auto loans or credit cards. Even worse are the consequences a person faces if they are unable to pay back their loan. In Illinois and several other states, the consequences of defaulting on student loans are the state suspending your driver’s license.
License Suspension
For one reason or another, people fall behind on their student loans. No one does it purposefully, but it does present an obstacle for many Americans. Outside of affecting credit, failure to pay back student loans results in a driver’s license or professional license suspended. So doctors, teachers, brokers, and many other professionals could lose out on their profession for a time. This poses a problem for people that rely on driving for or to work. But the consequences do not stop there, they affect other areas of life as well.
Driving Up Costs
As you probably know, driving on a suspended license is illegal and may result in arrest or impoundment. Additionally, those with a suspended license will have to obtain Sr-22 insurance and take defensive driving courses. The license suspension and Sr-22 insurance may also drive up the cost of your auto insurance once you are able to drive again. In summation, student loan defaulting starts a vicious cycle. Those who fall behind lose their ability to drive. A person’s inability to drive could result in wage lost, which makes paying back debts harder. As obvious as this advice is: do not fall behind, or pay the price.