Student Loans What States Have the Most and Least In 2019

The 2020 United States presidential election is coming up fast and student loans are one of the top topics presidential candidates are talking about. This year ,Americans are weighed down by student debt more so than ever.

The Class of 2018, 69% of college students took out student loans, and they graduated with an average debt of $29,800, including both private and federal debt. Meanwhile, 14% of their parents took out an average of $35,600 in federal Parent PLUS loans.

Student loans have reached $1.56 trillion in total U.S. student loan debt and Average monthly student loan payment (among that not in deferment): $393 Direct loans totaled $1.1503 trillion, Perkins $7.1 billion and Parent PlUS $89.9 billion.

Sens. Elizabeth Warren, Cory Booker, Kamala Harris, Kirsten Gillibrand and Rep. Tulsi Gabbard all endorsed Sen. Bernie Sanders' College for All Act in 2017. The $47 billion plan would eliminate undergraduate tuition and fees at public colleges and universities.

With several candidates for the 2020 presidential election proposing the cancellation or refinancing of America's massive student debt load, the personal-finance website WalletHub today released its report on 2019’s States with the Most and Least Student Debt.

To determine the states that are friendliest toward student-loan debtors, WalletHub compared the 50 states and the District of Columbia across 12 key metrics. The data set ranges from average student debt to unemployment rate among the population aged 25 to 34 to share of students with past-due loan balances.

Best vs. Worst

• Utah has the lowest average student debt, $18,838, which is two times lower than in Connecticut, the state with the highest at $38,510.
• Utah has the lowest proportion of students with debt, 38.00 percent, which is 1.9 times lower than in New Hampshire, South Dakota and West Virginia, the states with the highest at 74.00 percent.
• Massachusetts has the lowest share of student loans in past-due or default status, 7.58 percent, which is 2.4 times lower than in Mississippi, the state with the highest at 18.34 percent.
• Hawaii has the lowest share of student-loan borrowers aged 50 or older, 3.80 percent, which is 2.6 times lower than in Vermont, the state with the highest at 9.93 percent.

Expert Commentary

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

“One way to minimize student debt is not to go to college,” said Mark Nadler, PhD, Ashland University. “Make sure that your career goals actually require a university or college degree. If not, park your ego in a community college parking lot and learn a skill or acquire certification in an area that is in demand.”

“Don’t assume that you can only get a good education at a big name university that costs a lot of money each year,” said John A. Flanders, Central Methodist University. ” There are many schools that cost a lot less and still deliver a quality education. Often, such schools make it much easier for students to get to know and work with their faculty. Often they do NOT have Teaching Assistants – courses are taught by full-time faculty.’

“Take advantage of community colleges; many states offer two years of education with zero tuition for earning an Associate’s Degree – then transfer to a four-year institution to complete a baccalaureate degree.”

“Any time you take on credit, your first objective is to ensure your ability to repay the loan in the future. You can shop price, etc. but your first responsibility is to build great credit,” said Patrick A. Cozza, Fairleigh Dickinson University.

Do you agree with certain 2020 presidential candidates’ ideas on cancelling student debt? Why or why not?

“Congress doesn't need to pass a law cancelling student loan debt to achieve the goal of reducing the heavy debt burden on students and the economy, said Stephanie Genkin, CFP®, CDFA®, New York University. “(In addition to it being unfair to those who already paid off their loans!) Instead, the government should refinance loans the way banks refinance mortgages. As a Certified Financial Planner, I see plenty of clients crushed by federal loans that carry interest rates as high as 7.9%. It makes more sense to allow borrowers in good standing to refinance student loans to a similar rate offered to borrowers with good credit scores. Homeowners have been able to refinance their home loans to 3.5% or 4% in recent years. At half the interest rate, those with student loan debt would be less likely to default on their monthly payments -- a drag on the economy -- plus many borrowers would be able to pay off their loans without the need for 20 or 30 year extended repayment plans. For those in dire need, reducing or wiping out student loan debt in bankruptcy makes sense.”

“It seems like a great idea to cancel all existing student debt,” said Jeffry Haber, PhD, CPA, Iona College. ”But what about going forward? What will limit tuition increases, if not the marketplace? If government is the sole payer, then they will dictate the allowable increases. Not all schools have the same expense structure and this has all the traits of an idea that is only half-developed.”

“I disagree with just wiping out student debt,” said Ron G. Cheek, PhD, University of Louisiana Lafayette.” There should be a phase debt reduction based on the student’s contribution to society. For example if they go to work in a public capacity such as a fireman, policeman, teacher, government worker, etc. then let’s say there might be a phased 10 – 15 year reduction in their student loans. If any time during that period they left, their repayment schedule would kick back in.”

To view the full report and your state or the District’s rank, please visit:

https://wallethub.com/edu/best-and-worst-states-for-student-debt/7520/

Courtesy: WalletHub