Pennsylvanians struggling with student loan debt
The Biden administration is considering extending its pause on federal student loan repayments, leaving many state borrowers hoping for continued relief.
Why is this important: Student debt totals about $1.7 trillion in the United States, and Pennsylvania accounts for a large portion of it.
- The state ranks sixth in the nation for its share of residents short on student loans, according to June 2021 data from Advisor Smith.
- Many young borrowers say their loans are forcing them to put off major life decisions, like buying a home or starting a family.
Catch up fast: An emergency moratorium on federal student loan repayments in 2020 was only supposed to stay in effect for six months, but it has since been extended several times.
- Biden announced the latest extension in December, saying borrowers wouldn’t have to start making payments until May 1.
Enlarge: Pennsylvania has cut public funding per student for higher education by a third over the past decade as enrollment continues to decline.
- More than 60% of Pennsylvania graduates had student debt in 2019-20, according to The Institute for College Access and Success (TICAS). The average debt was around $39,300.
- About 1 in 5 college students in Pennsylvania take out private loans, which tend to be more expensive.
Between the lines: Low-income students, in particular, find it difficult to pursue higher education because of the costs.
- According to the Education Trust, many would have to work more than 40 hours a week to pay the net price of a four-year public institution in Pennsylvania.
What they say : “We live in a society where two-thirds of jobs require some type of post-secondary education,” Marshall Anthony Jr., research director for TICAS, told Axios. “So the dilemma for young adults is, ‘I need to have a college degree, but it looks like I’m going to have to go into debt to get one. “”
What there is to know: Anthony recommends borrowers make sure they know who their loan officer is as there is an ongoing account overhaul.
- FedLoan Servicing (operated by the Pennsylvania Higher Education Assistance Agency) is expected to leave the federal government‘s loan servicing system by the end of the year.
What else: Borrowers can consider income-driven repayment plans to ensure they don’t go over what they can afford.
What to watch: Gov. Tom Wolf is asking for a big allocation for public universities in his latest budget proposal that would bring funding up to $550 million.