Detecting Student Loan Debt

Unexpected medical expenses resulting from health problems may threaten an individual’s financial security. Kim et al. (2012) determined that unforeseen medical expenses result in serious financial burdens and bankruptcy for middle class families. In addition, new health complications deplete wealth and increase debt for the 50 to 64 age group. Correspondingly, scholars also determined that individuals in good health have two-and-a-half times more financial assets than those in poor health (Lahey et al., 2004). Repaying debt is difficult at any age, but repaying debt later in life due to health problems creates additional financial hurdles. Moreover, older adults face the challenges of reduced income, limited employment options, and fewer remaining years in the workforce. Thus, medical debt is expected to have a negative impact on the accumulation of financial assets and net worth of pre-retirees. …show more content…
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