In view of the fact that bankruptcy is not an option for eliminating student loan debt, borrowers are repaying student loan debt long into the life cycle (Miller, 2012). If a consumer allows a student loan to default, the actions taken by the Federal Government may include garnished wages, garnished tax refunds, and a reduction to Social Security retirement and disability payments. These consequences impact the retirement security of those holding student loan debts at this stage of the life cycle. In addition, servicing student loan debt at this stage of the life cycle may prevent additional funds from being saved for retirement. Thus, student loan debt is expected to have a negative impact on the accumulation of financial assets and net worth of
In view of the fact that bankruptcy is not an option for eliminating student loan debt, borrowers are repaying student loan debt long into the life cycle (Miller, 2012). If a consumer allows a student loan to default, the actions taken by the Federal Government may include garnished wages, garnished tax refunds, and a reduction to Social Security retirement and disability payments. These consequences impact the retirement security of those holding student loan debts at this stage of the life cycle. In addition, servicing student loan debt at this stage of the life cycle may prevent additional funds from being saved for retirement. Thus, student loan debt is expected to have a negative impact on the accumulation of financial assets and net worth of