Unfortunately, the next bubble that will pop will not leave me that lucky. In fact, the bursting of this bubble will have a rippling implication on millennial generation the hardest.
The next bubble is the student loan bubble and it is about to burst.
With students being handed buckets of money without any background checks for the last 40 years, the student loan national debt is raising yearly. Currently, the debt is $1.3 trillion, but with the class of 2016 just graduating, there are a plethora of new debtors already taking advantage of forbearances and deferments.
Unlike the economic crashes of 2000 and 2008 in which houses and business were seized, however, the student loan crash won’t force people to give up their diplomas as collateral. So, I guess the silver lining can be that you have your education – no one can take that away from you.
But if your student loans are not being paid aggressively, there is a good chance that you are going to face economic hardship. Your diploma is yours, but sanctions and regulations could be made in order to force you to pay your debt in manners to which you may not agree. This could be in the form of wage garnishment, income rebate high-jackings, or credit destruction.
A government bailout could be ordered to alleviate the $1.3 trillion, but thinking any of that money would fall on people taking out these loans, history tells us otherwise (think government bailout of 2008 going to the banks – people are still upside-down with mortgages).
The only way to avoid the ramifications of the student loan bubble pop is to aggressively pay off your student loan. If you are making minimum payments, it is mostly going to interest. If you’re in a forbearance or deferment, your interest is going up as you read this. Don’t get stuck in that cycle.
Finding extra money can help tremendously help without changing much of your life. You can read my tips on saving and increasing income here. Any “extra” income should go directly to your student loans. Do not pass go! Do not collect $200! Your ultimate goal is to avoid personal economic hardship.
I don’t write this to scare anyone or to make anyone feel like they are inadequate in paying off debt. I am the perfect example of if I can do it, anyone can do it. The key is to stay positive and keep your eyes on the goal. Being in a better financial place will set up your future to be secure and safe from whatever the economy does.
Let me be your accountability partner! Contact us if you have any questions, and don’t forget to sign up for our Free Resource Library to get all the information you need to pay off debt fast!