Survey: Utah ranked as state with the least amount of student debt

FILE - Student in college library | Photo by Dollar Gill on Unsplash via Cache Valley Daily, St. George News

LOGAN – With news recently that President Joe Biden plans to have the federal government forgive certain amounts of outstanding student loan debt throughout the country, which states are burdened the most and the least with student loan debt?

Federal student loans repayment has been paused again, location and date unspecified | Photo courtesy of USU Extension, St. George News

At the end of the first quarter of 2022, total outstanding college-loan balances across the country stood at nearly $1.61 trillion, according to the Department of Education. That comes out to an average of $37,000 for each of the 43.4 million borrowers.

It turns out that student loan debt in Utah is the lowest in the country. According to personal finance site WalletHub, Utah is the lowest-ranked state in Average Student Debt as well as Proportion of Students With Debt. The survey also examined opportunities for college-aged adults to earn grants and find employment, two areas where Utah also scored well with low unemployment and a strong economy.

As students arrive on campuses across the country, Associate Professor Jeff Dew from the School of Family Life, College of Family, Home and Social Sciences at Brigham Young University offers tips students can use to minimize the amount of debt they take out for higher education.

“First, research the different institutions in which you are interested so that you can get the education you need while paying the least for it,” Dew explains. “In-state universities generally offer quality education for much less than universities outside your state. Community colleges are a great way to start and may allow you to save money on the first two years of your studies.

“You may want to consider vocational schools. Vocational schools place a much greater percentage of their students in professional jobs than do universities. Furthermore, there are many occupations (e.g., electricians) that are suffering massive shortages of workers, but that pays well. Vocational schools take much less time and money than traditional higher education.

“Second, maintain at least a part-time job while studying. Students often suggest that it is unrealistic to work 20 hours per week on top of rigorous classes. I disagree. Both anecdotal evidence and research studies suggest that students can work part-time and still get good grades. In fact, having a job may force students to prioritize their time use more effectively.

“Third, if you do take out a student loan, do not spend any of it on things unrelated to your education. (And yes, eating out is unrelated to your education).

“Fourth, use a spending plan or budget. Living on a spending plan allows you to control your money and put it toward your financial goals. It helps you identify spending that you do not really want to make and helps you shift to spending money on things you want to buy.”

The president’s plan would cancel up to $10,000 of federal student loan debt for individuals making less than $125,000 per year, or households making less than $250,000 per year – based on the previous year’s tax returns. Those who received Pell Grants may qualify for up to $20,000 in loan forgiveness. With the amount of student loan debt skyrocketing in America, it has some wondering if limits should be put in place on the amount of money students can borrow.

“The federal government should help students pay for college with more financial aid alternatives to student loans,” says Andrew Burnstine, Ph.D., associate professor at Lynn University. “One way to do this is for the federal government to increase the size of Pell Grants and make them available to more working-class and middle-class students. This is a better alternative to reducing the amount students can borrow, a policy that by itself would reduce access to quality colleges and universities.”

Costs of attending an institution of higher learning are soaring. Current and prospective students are encouraged to weigh the financial return on their academic investments.

“On one hand, continued education and/or higher education after high school has never been more important relative to financial and general social outcomes than now,” says Philip A. Ballinger, Associate Vice Provost for Enrollment and Undergraduate Admissions at the Henry M. Jackson School of International Studies at University of Washington. “But on the other hand, the process of successfully attaining that education has never been more financially risky for students and their families.

“The main personal and social issue of concern is the number of students who take educational loans but do not complete their degrees. Loans make sense for the majority of students if they complete their degrees. The single most important factor for student success is full-time enrollment in each academic term. Policies that encourage and support full-time enrollment for students receiving student loans would have the most beneficial effects for the student and society in general.”

The study examined 11 key metrics, including Average Student Debt, Proportion of Students with Debt, Student Debt as Share of Income, Share of Student Loans in Past-Due or Default Status, Share of Federal Student Loan Borrowers Enrolled in an Income-Driven Repayment Plan, Unemployment Rate among Population Aged 25 to 34, Underemployment Rate, Availability of Student Jobs, Availability of Paid Internships, Grant Growth, and Presence of “Student Loan Ombudsmen” Law. Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Institute for College Access & Success, Federal Reserve Bank of New York, Council for Community and Economic Research, U.S. Department of Education College Affordability & Transparency Center, Internships.com, LendEDU, The Pew Charitable Trusts, Internships.com and Indeed.

Written by ERIC FRANDSEN, Cache Valley Daily

Copyright © CacheValleyDaily.com LLC, all rights reserved.

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