I read a post last week at a blog I just discovered called The End of Insanity. The particular post that I read had a LOT of comments because the author argued a controversial point: there’s no real reason to pay back student loans. She feels that her loans are “more of a psychological ball and chain than an actual financial burden.” I found her reasoning behind this statement a little unclear. Apparently, she’s on an income based repayment plan (IBR) and her loans will be forgiven in 25 years, but I don’t understand why she thinks that means it’s ok to stop paying them now. Maybe I just don’t know enough about IBR, but I don’t see the relationship between the payments she has to make today and the loan forgiveness in the future.
At any rate, the post and the comments that followed really got me thinking: why do people pay back their student loans? It’s not like your education or degree can be repossessed like a car or a house. Sure, there will be implications, like a trashed credit score and garnished wages. But a lot of people don’t know those things and they still continue to make their student loan payments every month, but most do know that their degree can’t be revoked. So why? Why do people keep paying?
I can’t speak for others, but I know that I faithfully make my student loan payments every month because:
a. I think that it’s morally wrong to borrow money and not pay it back, whether that’s to a family member, a bank, or the federal government.
b. My dad co-signed my student loans and if I didn’t pay them, he’d have to. And that would be super shitty of me, given that my parents have busted their butts provide for me.
c. I DO know that the government will go to great lengths to get its money back, so I don’t want to face the financial consequences discussed above, like a trashed credit score, garnished wages, the inability to borrow again, etc.
So what about you? Why ARE you paying your loans back?
