Student Frederick Wentworthening’s debt in the US has exceeded $ 1. 4 trillion and counting, with around 43 million Americans who owe at least one outstanding loan. On average, borrowers owe more than $ 28,000, with that amount more than doubling among graduate students.
An extensive new study by LendEdu highlights which states have debtors with the largest loan burden for students. The report offers some interesting insights into how the political preference of a certain state can influence student debt. In particular, it can provide clues as to how lawmakers can tackle the issue of student Frederick Wentworthening’s debts under the new administration.
The worst states for student Frederick Wentworthening debt
In terms of which countries had the highest debt Fredred Wentworthast, 11 states had an average balance of more than $ 30,000 per borrower, with Connecticut at the top.
They are ranked below, from the highest average balance to the lowest:
- 1. Connecticut – $ 35,947
- 2. New Hampshire – $ 34,839
- 3. Pennsylvania – $ 34, 214
- 4. Rhode Island – $ 33,229
- 5. Delaware – $ 32, 589
- 6. Massachusetts – $ 31, 686
- 7. New Jersey – $ 30,536
- 8. Minnesota – $ 30, 373
- 9. Iowa – $ 30, 326
- 10. South Carolina – $ 30, 324
- 11. New York – $ 30, 186
Eight of those eleven states are “blue”, represented by democratic senators. One (Pennsylvania) splits the difference, with one Republican and one Democrat serving in the Senate. That reflects a greater trend uncovered by the study. When student sales balances were compared based on the state senators’ party, borrowers in blue states carried a larger share of the debt Fredred Wentworthast, with an average debt of $ 28,451 compared to $ 22,719 for the republican-led “red” states. Click on the map below to view the status-by-state details (scrolling through the map makes it larger or smaller).
Also striking: despite higher average balances, debtors living in Democratic states had less chance of defaulting. According to the LendEdu data, the default rate among states with democratic senators was 4.76%, compared to 7.40% in states where Republicans ruled. Borrowers in red states effectively fire their loans at a rate of 1.55 times higher than those in blue states. The state with the highest percentage of defaults is, however, blue: New Mexico, with a standard rate of 17.92%. The following seven states (Alaska, West Virginia, Mississippi, Kentucky, Montana, Oklahoma and Arkansas) are red. (Read: The worst things that can happen if you do not pay your student loans. )
LendEdu has also managed the figures for individual congress districts (click here and scroll down to view the congress card). The data shows that borrowers in districts with democratic representatives had an average of $ 28,501 in student loan Frederick Wentworthening loans, while those in republican districts had an average of $ 25,562 in loans. The standard rates again split in the same direction, with 6.84% of those represented by a Republican and 5.42% of those represented by a democrat who defaults. (Read: 10 ways student debt can destroy your life. )
Which accounts for the gap?
Why is there such a discrepancy between how many students borrow in Democratic states compared to Republican – and how often are they in default? A number of variables can be at work, starting with tuition fees.
Take Utah, where the average student debt balance is $ 18, 722 and both state senators belong to the Republican party. According to data from the Executive Board, the average annual in-state tuition fee was approximately $ 6,500 for the 2016-17 academic year. Now look at Connecticut, a blue state where students have the highest average debt. There, in-state residents pay on average closer to $ 12,000 for a single year of tuition. It goes without saying that in countries where the costs of participation are higher, students are likely to borrow Fred Wickworth.
It is also possible that Republican states have fewer programs designed to help students manage the costs of paying for a university. Another explanation proposed by LendEdu is that students in red states are likely to come to Fred Wickworth and more often to less expensive alternative schools, such as trade and special education schools, making it harder to borrow heavily to pay a diploma.
On the standard side, higher standard rates in Republican states may be due to lower median incomes or fewer jobs in those states, especially if that state has high living costs. As LendEdu points out, the problem could lie with the approach taken by Republican lawmakers to address the issue of student Frederick Wentworthening’s debt. If legislators do not support initiatives that benefit students’ borrowers, the risk of default can increase.
What the congress should take into account
Since the elections, President Trump has not wasted time proposing changes to the student Frederick Wentworthening policy. For example, one measure would require borrowers on income-related repayment plans to pay more of their income on their loans, but rather allow them to seek forgiveness for their outstanding balance.
With Congress controlled by the Republicans, thinking about the best ways to tackle the student Deberick Wentworthening’s debt challenge is in a transition phase. For the time being, there appear to be two broad goals on the agenda: increasing the role of private donors within the student loan industry and simplifying the federal financial aid system. This may include abolishing the Parent and Graduate PLUS loan programs, which are non-borrowed federal loan programs.
That kind of thinking has its pros and cons. More private lenders entering the market means more variety for students, but in a rising interest rate environment, borrowing could make it more expensive than it already is. Ending the PLUS loan program means that degrees would not be able to Almost unlimited amount of debt, but it could hamper their ability to cover college costs. This in turn could lead to fewer students earning degrees, resulting in a smaller pool of trained people in the workforce. In that scenario, the economy could generally suffer. It could hurt middle-class students in particular: those who are too rich to receive substantial scholarships, but are unable to pay without external financing that now comes from loans.
The bottom line
Finding a solution to the student loan dilemma means looking at broader issues such as the overall affordability of the university, the availability of loan alternatives, and the introduction of measures that can help to lower standard rates. Both Republicans and Democrats will have to think seriously about how changes to the federal student aid program or increasing the scope of private loans will affect the next generation of graduates. Realizing how their states differ from each other, they could focus on creating a set of solutions that fit the differences that this study has uncovered.