Student loan debt repayments to restart in only a few weeks - top 10 most affected states
Student loan debt is a critical issue affecting millions of Americans with repayments set to restart in only a matter of weeks.
Americans are due to start paying student loan repayments again in the next couple of weeks.
As of September 1, interest on federal student loans resumed following President Joe Biden’s payment moratorium which was introduced during the pandemic.
From October 1, which is in less than two weeks, former students will have to pay towards their debt balance.
According to the Education Data Initiative, the average federal student loan debt is $37,338 per borrower with private student loan debt averaging $54,921 per borrower.
In 2023, around 45.3 million people have student loan debt with 92 percent of this amount having federal loans.
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Recently, Wallethub compiled a list of the top 10 states which will be most affected by the student loan moratorium ending, including:
- 1. Pennsylvania
- 2. Mississippi
- 3. New Hampshire
- 4. Delaware
- 5. New Jersey
- 6. North Carolina
- 7. Connecticut
- 8. Wisconsin
- 9. Kentucky
- 10. Arkansas.
Furthermore, the personal finance website broke down the top 10 states in the US which will be least affected by the decision to end the moratorium, including:
- 1. Hawaii
- 2. Nevada
- 3. Oregon
- 4. Oklahoma
- 5. Utah
- 6. Idaho
- 7. New Mexico
- 8. Montana
- 9. Washington
- 10. Wyoming.
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As well as this, Wallethub published the results of its survey looking at the student loan moratorium which found that 48 percent of Americans think the policy was not fair to taxpayers.
However, over three-quarters of those polled with loan debt shared that the moratorium has been helpful for them.
Some 56 percent of individuals with student loan debt admitted that the end of the student loan moratorium will affect their finances a great deal.
One in three Americans with student loan debt do not know how long it will take to pay off their debt, according to the survey.
Gyan Pradhan, a professor and the chair of the Department of Economics at Christopher Newport University, outlined why student loan forgiveness, in some form, is a worthwhile pursuit by the Biden administration.
He explained: “For those student borrowers who have no realistic ability to repay the loans, or for whom the repayments are a huge burden. Loan forgiveness also helps the economy because borrowers will have more disposable income to spend (on housing, for instance).
“The resulting increase in the demand for goods and services can provide a stimulus for increased economic activity, increasing output and employment.
“However, loan forgiveness can provide incentives for students to borrow beyond their means if they are convinced that their debt will be forgiven. Loan forgiveness may need to be targeted to the most vulnerable groups.”
