Pennsylvanians struggle with student loan debt
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.
- 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.
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