Student loans plague the minds of millions of Americans, but people often have more financial obligations than student loan debt to worry about. Your budget may already be stretched thin between other debts, bills, and necessities. If you are experiencing financial hardship on top of everything, it may feel impossible to honor every financial obligation, including your student loan payments.
Unfortunately, defaulting on your private student loans can greatly impact your financial health, resulting in consequences you may not have anticipated. Many people don’t realize that defaulting on federal student loans can affect your job prospects, and the same may be true for private student loans. Private student loan debt can be challenging to handle when you’re in a difficult financial situation. It may be beneficial to consult a private student loan settlement lawyer to help you explore ways to address your debt.
You Could Get Rejected for Positions That Require a Credit Check
In many places, a background check is a fundamental part of the hiring process. For certain positions, a credit check is included in that process, meaning your credit could play a factor in whether you get hired. While some states have restricted or banned the use of credit checks in the workplace, they are not prohibited on the national level and are still a part of the hiring process in many states. If the positions you’re applying for involve government work, security clearance, financial advice, or expenses, you’ll likely need good credit to succeed.
In January 2020, the House of Representatives passed bills prohibiting discrimination against people with bad credit. These bills, which aim to reform the credit reporting system and empower consumers, included H.R. 3614, also known as the Restricting Credit Checks for Employment Decisions Act. H.R. 3614 would make it illegal for employers to use credit reports to make hiring choices unless a credit report is required by Federal, state, or municipal law or for a national security clearance. Currently, these bills have not moved any further.
You May Be Ineligible for Future Student Loans
Often, your job prospects are limited by your level of education. Whether you are attempting to earn more, secure a higher position, or change careers, education is usually a go-to strategy for making yourself more marketable while job hunting. However, higher education is costly, and if you are struggling financially, you will likely need to rely on securing more student loans to further your education.
While defaulting on private student loans may not affect your ability to secure federal aid, you are unlikely to qualify for private student loans without an exceptionally creditworthy cosigner. Typically, students who do not receive enough federal aid will rely on private loans to make up the difference. However, defaulting on a loan severely damages your credit. As a result, you may have limited access to future private loans.
You May Not Lose Your Professional License
While federal loan defaulters may be at risk of having their professional licenses suspended or revoked, this may not be the case for those who default on private student loans. Because these licenses are typically supervised and issued by state agencies, it’s important to them that you are on top of your student loan payments. Though, this will depend on your state and occupation.
Fortunately, this seems to only apply to federal student loans. Those who default only on private student loans are likely not affected as they did not use government money to obtain their education or certification.
Talk to a Debt Settlement Lawyer About Your Private Student Loans
Private student loans are some of the most difficult debts to deal with, but it’s crucial to look for ways to make them more manageable. Defaulting on your private student loans can limit which job opportunities you can pursue, which will limit your financial future. Working with a private student loan settlement lawyer could help prevent this.
McCarthy Law is staffed by experienced debt negotiation lawyers who have the knowledge and resources to help you settle your private student loans. Struggling with private student loans doesn’t have to ruin your credit or future. Our legal professionals have helped numerous graduates explore their options for reducing what they owe. To learn more about your options for student loan settlement, schedule a free consultation with our firm by calling (855) 976-5777 or submitting our contact form.