Pennsylvanians struggle with student loan debt
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The Biden administration is considering extending its pause on federal student loan repayments, leaving many borrowers in the state hopeful for continued relief.
Why it matters: Student debt totals about $1.7 trillion in the U.S., and Pennsylvania makes up a large portion.
- The state ranks sixth in the nation for its share of residents strapped with student loans, according to June 2021 data from Advisor Smith.
- Many young borrowers say their loans are forcing them to delay major life decisions, like buying homes or starting families.
Catch up fast: An emergency moratorium on federal student loan payments in 2020 was only supposed to stay in effect for six months, but it's since been extended several times.
- Biden announced the latest extension in December, saying borrowers wouldn't have to start making the payments until May 1.
Zoom in: Pennsylvania has cut its state funding per student for higher education by a third over the past decade as enrollment continues to fall.
- More than 60% of Pennsylvania graduates had student debt in 2019-2020, according to The Institute for College Access and Success (TICAS). The average debt was around $39,300.
- Roughly 1 in 5 college students in Pennsylvania takes out private loans, which tend to be more costly.
Between the lines: Low-income students, in particular, face a difficult time pursuing higher education because of costs.
- Many would have to work over 40 hours a week to afford the net price of a four-year public institution in Pennsylvania, according to the Education Trust.
What they're saying: "We live in a society where two-thirds of jobs require some type of post-secondary education," Marshall Anthony Jr., research director for TICAS, tells Axios. "So the dilemma for young adults is, 'I have to have a college degree, but it looks like I'm going to have to go into debt to get one.'"
What to know: Anthony recommends borrowers make sure they know who their loan servicer is since there's an ongoing overhaul of accounts.
- FedLoan Servicing (operated by the Pennsylvania Higher Education Assistance Agency) is expected to transition out of the federal government's loan servicing system by the end of the year.
What else: Borrowers can consider income-driven repayment plans to help ensure they're not exceeding what they can afford.
What to watch: Gov. Tom Wolf is requesting a significant allocation for state-owned universities in his latest budget proposal that would raise funding to $550 million.