Student Loan Repayment Alternatives from Other Countries

While most are aware of the crisis that defaulted student loans are becoming across the U.S, the discussion seldom incorporates methods from other countries in how to deal with this rapidly growing problem. Why are other developed countries not experiencing the same issues we are here in the U.S when they have similar debt levels after graduating from post -secondary education?

For instance in Australia the levels of debt are very similar but the repayment method is wholly foreign to our thought process. Rather than make repayment over 10 years and the payments remaining the same throughout in the payments fluctuate with the income of the debt holder over the life of the debt. In addition the debt repayments do not even begin until the recipient has reached a salary of over $40,000.

Other countries have taken a similar novel approach to their own student loan debt. In many countries the span of time allowed to repay a student loan debt is much broader than it is in the U.S. In Germany the amount of time given to students for repayment is 20 years and in England it is a full 30 years. The rationale behind this approach is that we typically loan an amount and expect repayment in accordance with the length of time the item will last.

Mortgages are 25 years because a house will last many decades. Car loans are shorter because typically automobiles last a shorter duration. Should a student loan not be given the same consideration? If the “item” purchased, in this case an education, will last a lifetime then should not the payments at least extend for a larger portion of that length of time?

If you are having problems with your student debt be sure to talk to a student loan debt relief attorney to see how they can help.