The state where student loan borrowers struggle the most to repay their debt: report
Student loan repayments can drain your wallet and throw your budget off balance. But for borrowers in some states, the burden of student debt is even heavier, according to a new report.
Dr. Andrew Gillen of the Texas Public Policy Foundation analyzed Department of Education data to determine where borrowers had the highest percentage of student debt to annual income over two years. after graduation. He found that student loan borrowers in Montana have the most difficulty paying off their debts.
Aside from Montana, most of the other states where borrowers have poor debt-to-earnings ratios are in the South. Student loan borrowers in Louisiana, West Virginia, Carolina, Tennessee and Georgia are among the most affected by unmanageable student loans.
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Typically, borrowers have the least difficulty repaying their student loans in the West and parts of the Midwest. Residents of North Dakota have an excellent percentage of debt to profits after graduation, the report found. Minnesota, Utah, Alaska, and California are other states where borrowers have better debt-to-earnings ratios.
Read on to learn more about what you can do if you’re having trouble paying off your student loan debt, like refinancing. Visit Credible at compare student loan refinance rates for free without affecting your credit score.
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What to do if you’re having trouble paying off your student loans
Federal student loan repayments are on break until February 2022, but that’s only in a few months. If you’re not ready for the end of the forbearance period, or struggling to pay off private student loan debt, consider the options below:
- Join an Income Based Repayment Plan (IDR). Federal student loan borrowers can enroll in an IDR plan to limit their monthly payments to 10-20% of their discretionary income on the Federal Student Aid (FSA) website.
- Request additional federal forbearance. COVID-19 administrative forbearance expires in January 2022. If you are not ready to resume payments, request up to 36 additional months of forbearance in the event of economic hardship or postponement of unemployment.
- Reduce your monthly payments with refinancing. By setting a lower student loan rate, you may be able to lower your monthly payments and save money on interest over time. Credible, well-qualified borrowers have been able to save over $ 250 per month by refinancing.
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It is important to know that refinance your federal student loan debt in a private loan would make you ineligible for certain government protections like IDR plans, zero interest forbearance, and student loan waiver programs.
Get in touch with a competent loan officer at Credible who can help you determine if student loan refinancing is right for you.
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How to decide if you should refinance your student loans
Refinancing a student loan can help repay your loans faster or save money on your monthly payments. Additionally, the time has come to lock in a private student loan rate as interest rates are historically low, according to Credible data.
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While federal student loan rates depend on the year you borrow them, private student loan rate vary from lender to lender depending on the creditworthiness of the borrower. Borrowers with good credit will be entitled to lower interest rates and better loan repayment terms. On the other hand, borrowers with bad credit should consider using a solvent co-signer to get a better rate.
Browse student loan rate real private lenders in the table below, and use a student loan refinance calculator to see if this option is worth it.
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