Student Debt in New York State Among Worst in Nation
This isn't good...
Student loan repayments have resumed, much to the chagrin of borrowers everywhere. Economists are already sounding the alarm that the economy can't take the hit.
Currently, student loan debt stands at $1.78 trillion, making it the second highest consumer debt category behind mortgages. That comes out to an average of over $37,000 of debt for each borrower.
Additionally, the Federal Reserve says student loan debt increased by more than 100% over the past decade.
Those numbers stand to skyrocket even higher now that repayments have restarted, especially since interest rates on student loans average between 7 and 8 percent.
And, with more than 43 million people on the hook, that could heavily impact the nation's current spending habits.
How do NY borrowers fare?
A new survey from WalletHub looked into what states have the highest student loan repayments. It determined this by analyzing the latest consumer data and compared the median student loan payment amounts across the 50 states.
New York didn't do great in the roundup and made the top 10 states with the highest repayments.
In all, New York had the 8th highest number, with the average resident paying $212 a month.
That's only a few dollars less than the #1 state, Maryland, with the average repayment hitting $232 per month.
This also illuminates an uncomfortable finding about New York homeowners. Along with having some of the highest repayment rates, our state has very few homeowners between the ages of 25 and 34.
In fact, New York was the third-worst state for home ownership for recent grads. We placed third last.
Additionally, WalletHub found NY has the 14th highest number of student loans past due or in default.
Tips for Paying off Student Loans Faster
Borrowers are encouraged to scrutinize their budgets and determine what they can and cannot live without.
This number has economists wondering where that money is going to be diverted from - whether it be cars, homes, goods, services or entertainment.
These same people are also encouraged to take on a side hustle to increase their income, which hilariously would cause their repayments to go up to match their new salary. However, people can seek out jobs that offer partial loan repayments or reimbursement as a perk.
Those with excellent credit can transfer a portion of their debt to a card with a 0% - if those even exist anymore - and try to refinance. By doing that, it'll slash the insane interest from accruing.
What economists are saying
The current estimate is that when student loan repayments resume in October, that'll take roughly $73 billion out of the economy. That's directly from Moody's Analytics.
Market watchers are deeply concerned student loan repayments will be the straw that breaks the camel's back and veer America into a recession.
The timing isn't great either since the nation is heading into the biggest spending season of the year.
The main concern they have is Americans are already ponying up more cash for essential things, like energy and food than when the moratorium on student loan payments was enacted. Meaning, borrowers probably used the money they would have used to pay off their loan to keep themselves afloat over the past three years.
Tacking on an additional bill when residents are already paying absurdly high prices for just about everything could potentially spell certain disaster and force taxpayers to make even tougher choices. children to replace and support the older population.
Food for thought
I am among the 43 million borrowers struggling with student loan debt. I took out roughly $120,000 in loans to pay for my Master and have been throwing an absurd amount of money at my loans ever since.
My interest rates, which are fixed, are at 7 and 8 percent. After a decade of paying on time, I whittled my principal down to $90,000.
However, I now owe more than $127,000 thanks to my interest rates, which has me thinking I will never be able to pay off my loans.
My first payment since the moratorium ended diverted all the money to the interest. How is that fair?
My suggestion to our political leaders would be to slash the interest rates to 0 and have students just pay back what they owe. And maybe credit what they paid in interest to their principal.
Another suggestion would be to investigate why it costs so darn much to get a college degree nowadays and try to put a cap on tuition costs.
What do you think should be done about the student loan crisis? Also, I'm open to any advice on how I can start hacking away at my debt.
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Gallery Credit: Cameron Coats