CHEYENNE — Wyoming ranks first in the nation for the percentage of federal student loan borrowers whose debt will be completely eliminated by a new federal loan forgiveness initiative.
Last week, President Joe Biden said $10,000 in federal student debt would be forgiven for most borrowers and up to $20,000 for Pell grant recipients.
An additional payment break will be extended until December 31, and undergraduate loan payments can be capped at 5% of a person’s monthly income.
If the administration goes through with the plan, 37.8% of Wyoming residents who have taken out federal student loans will have a zero balance, according to an analysis by Student Loan Hero, a student loan tool under LendingTree. He analyzed data from the US Department of Education.
The other two hardest hit states are Nevada and Utah, both at just over 36%.
Student loan hero senior economist Jacob Channel told the Wyoming Tribune Eagle on Tuesday that this was made possible in part because borrowers in Wyoming owed 20% less than the national average of $36,689.
At nearly $29,000 per federal borrower, only residents of Nebraska and North Dakota have such low student debt.
“There aren’t necessarily a ton of private schools in Wyoming,” explained the former Sheridan resident, who studied economics in the state. “A lot of people gravitate toward community college or the University of Wyoming, which are generally cheaper options that don’t require as much debt as some other institutions. So in that regard, I think Wyoming is in pretty good shape.
The $29,000 average among these borrowers across the state is affected by older residents with more debt.
Meanwhile, the Education Data Initiative found that in April the highest number of borrowers were between the ages of 36 and 49, and they owed an average of $40,000. This totals over $740 million in student debt. Residents 50 and older owed the highest amount, averaging more than $40,000 per borrower.
Channel said many older borrowers may not be able to afford the amount requested by the US Department of Education, plus accrued interest on debt.
“You have a contingent of people who are going to school later in life for the first time, who may have missed out on some scholarship opportunities that might be a little more readily available to high schoolers,” he said. declared.
“The way student loans work, if you’re not able to repay them in full…your debt can quickly spiral out of control because of the interest.”
The National Center for Education Statistics found that after adjusting for inflation, tuition fees have increased 748% since 1963.
Although young students are expected to pay thousands of dollars more in tuition than their elders, they are among the borrowers with the lowest student debt. According to the Education Data Initiative, nearly 8,500 Wyoming residents are 24 and younger and owe an average of $10,588.
Those aged 25 to 34 owe an average of $26,257 and there are 17,900 borrowers.
“A lot of new borrowers, these groups of young people that we often talk about more when we talk about student loans, they can easily find themselves in the same situation as older people,” Channel said. “Where they can’t meet their payments and their debt can swell.”
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