FILE PHOTO: Student at the college library. Photo by Dollar Gill on Unsplash
LOGAN — With recent news that President Joe Biden plans to ask the federal government to forgive certain amounts of outstanding student loan debt across the country, which states are most and least burdened with student loan debt? At the end of the first quarter of 2022, total outstanding college loan balances across the country stood at nearly $1.61 trillion, according to the Department of Education. That works out to an average of $37,000 for each of the 43.4 million borrowers.
It turns out that student loan debt in Utah is the lowest in the country. According to personal finance site WalletHub, Utah is the lowest-ranked state in terms of average student debt and proportion of students in debt. The survey also looked at opportunities for college-age adults to win scholarships and find jobs, two areas where Utah has also done well with low unemployment and a strong economy.
As students arrive on campuses across the country, Associate Professor Jeff Dew of Brigham Young University’s School of Family Life, College of Family, Home and Social Sciences offers tips students can use to minimize the amount of debt they take on for higher education.
“First, research the different institutions you’re interested in so you can get the education you need while paying the least amount,” says Dew. “In-state universities generally offer quality education for much less than universities outside your state. Community colleges are a great way to start and can save you money in the first two years of your education. You may want to consider vocational schools. Vocational schools place a much higher percentage of their students in professional jobs than universities. Also, many professions (e.g. electricians) suffer from massive labor shortages, but it pays well. Vocational schools take much less time and money than traditional higher education.
“Second, maintain at least one part-time job while in school. Students often suggest that working 20 hours a week on top of rigorous coursework is unrealistic. I do not agree. Anecdotal evidence and research studies suggest that students can work part-time and still get good grades. In fact, having a job can force students to prioritize their schedules more effectively.
“Third, if you take out a student loan, don’t spend anything on things unrelated to your studies. (And yes, eating out has nothing to do with your upbringing).
“Fourth, use a spending plan or budget. Living by a spending plan allows you to control your money and spend it on your financial goals. It helps you identify the expenses you don’t really want to spend and helps you spend money on things you want to buy. »
The president’s plan would forgive up to $10,000 in federal student loan debt for people earning less than $125,000 a year or households earning less than $250,000 a year – based on US tax returns last year. Those who have received Pell Grants can qualify for loan forgiveness of up to $20,000. With the amount of student loan debt skyrocketing in America, some wonder if limits should be put in place on the amount of money students can borrow.
“Feds should help students pay for college with more financial aid alternatives to student loans,” says Andrew Burnstine, Ph.D., associate professor at Lynn University. “One way to do this is for the federal government to increase the size of the Pell Grants and make them available to more working-class and middle-class students. This is a better alternative to reducing the amount students can borrow, a policy that in itself would reduce access to quality colleges and universities.
The costs of attending a higher education institution are skyrocketing. Current and prospective students are encouraged to weigh the financial return on their academic investments.
“On the one hand, continuing education and/or higher education after high school has never been more important than it is now to overall financial and social outcomes,” says Philip A. Ballinger, associate vice provost, enrollment and undergraduate admissions at the Henry M. Jackson School of International Studies at the University of Washington. “But on the other hand, the process of achieving this education has never been so financially risky for students and their families.
“The main personal and social concern is the number of students who take out student loans but do not complete their studies. The loans make sense for the majority of students IF they complete their studies. The most important factor for student success is full-time enrollment each academic term. Policies that encourage and support full-time enrollment of students who receive student loans would have the most beneficial effects for the student and society at large.
The study looked at 11 key metrics, including average student debt, share of student debt, student debt as a share of income, share of student loans in arrears or defaults, share of federal borrowers of student loans enrolled in an income-oriented repayment. Plan, unemployment rate among the population aged 25-34, underemployment rate, availability of student jobs, availability of paid internships, scholarship growth, and the presence of the “student loan mediator” law. The data used to create this ranking was collected from the US Census Bureau, Bureau of Labor Statistics, Institute for College Access & Success, Federal Reserve Bank of New York, Council for Community and Economic Research, US Department of Education College Affordability & Transparency Center, Internships.com, LendEDU, The Pew Charitable Trusts, Internships.com and Indeed.