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Wednesday, April 7, 2010

Four Ways That Student Loan Debt Is Like A Tattoo

Four Ways That Student Loan Debt Is Like A Tattoo

One of the harder discussions I have with consumer clients is explaining student loan debt. That's because student loan debt is troublesome in a lot of ways. To show the quirky nature of student loans, I am using a little analogy.

Here are four ways that student loan debt is like a tattoo.

#1 You tend to get it when you're young.

What's the typical age for the first tattoo? I found 
one Danish site that said about 23 years old for men and 21 for women. Folks tend to get student loans at about the same time. They are in college or grad school and need money to pay for it.

#2 They are easy to get.

What do you need to get a tattoo? Evidence that you are old enough and a few bucks in your pocket.

What do you need to get a student loan? Often even less. You don't necessarily need to have any money or show any sign of being employable.

#3 They are hard to get rid of.

Seriously, ever try to get rid of a tattoo? It costs a lot of money and takes a lot of time. A tattoo is pretty much designed to go with you to your grave.

Just like a student loan.

Odds are, you will pay off the student loan or you will take it to your grave.

#4 I can't help you much with either one.

It's true. I am a restructuring attorney, not a dermatologist. If you want to get a tattoo removed, I can't help you.

If you want to get rid of a student loan, there isn't much I can do for you there either. Almost every kind of debt can be addressed one way or another. Most kinds are dischargeable in a chapter 7 bankruptcy. Almost all kinds are dischargeable in a chapter 13 bankruptcy. Secured debt can be addressed through the collateral. Some kinds can be negotiated and settled with lenders.

But student loan debt is dischargeable only in cases of undue hardship. The caselaw on undue hardship is not favorable for the borrower. If you are able to work, your chances of getting a student loan discharged are not good.

That said, if we eliminate or restructure your other debts, you might find that the student loan payments are easier to make. And sometimes you can consolidate loans to reduce interest rates and improve the payment plan.

But keep all of this in mind if you thinking about getting a tattoo or dealing with education expenses.

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