I’m not American so the concept of a college loan is very alien to me. In my country we either pay for college tuition up front, apply for financial aid if our grades are high enough and your family is needy enough, or you don’t go at all. And In some public universities, tuition is either wholly or partially government subsidized.
I’ve heard of Americans complaining how they’ve got thousands of dollars in college debt and in some cases they take your whole adult life to pay off. So why are college loans even a thing in the US and what happens when you’re not able to pay it off?
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All colleges have tuition, and none of it is subsidized unless you get a scholarship for sports or exceptional academics (rare), and in some cases the government will pay a VERY small amount if you and your parents income is considered below the poverty level (this might pay the full tuition for like a technical college or small community College 2 year degree).
If you want a job that pays over minimum wage then you either need to work your ass off to get promoted, become an “entrepreneur” or get a degree in a high demand specialized field from a university. If you go to a college out of your home state, you pay more (so dumb I know), or if you need over 4 years to complete your degree it can be very expensive. 100s of thousands of dollars.
This is a lot of money for the average person, and we have to take out loans to pay for it. Some loans you don’t have to pay until you graduate, and some loans have pretty high interest after a certain amount of time.
If you don’t pay it, your credit score goes down and you won’t be able to get anything on credit in the future (not sure what you know of credit in the U.S. but a credit score is based on your loan payments and total debt and gives a score based upon how well you handle those items and your proven record of paying them back)
Almost all big purchases as an adult are acquired by getting a loan- a home, a car, credit cards, personal loansns etc) and to get approved you need a good credit score. Most Americans are wildly deep in debt just to live comfortably.
By defaulting on a school loan you screw up your future to own anything, and the lender can file a court lawsuit to have your wages garnished so you’ll eventually have to pay it anyway.
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