On average, Georgians have the most student loan debt per capita in the U.S., about $5,870 per person. With just over 10 million people in Georgia, that’s almost 60 billion dollars worth of student debt. Georgia also has a 13 percent student loan delinquency rate, delinquency meaning 90 days or more late on payment.
College loan debt isn’t only a problem in Georgia, Jamie Hopkins of Forbes writes, “For the class of 2016, the average graduate left school loaded with $37,172 of student loan debt… Many of the issues facing the student loan industry right now are strikingly similar to the issues that led to the collapse of the housing markets in the early 2000s.”
We recently covered how Hillary wants to help with the cost of college, here’s what she wants to do about debt and how it would affect Georgians:
- Refinancing student loans
The average Georgia graduate is carrying the burden of over $30,000 in student loans, and the average student pays about $350 per month or $4,200 per year in student loan payments. With an average annual income just over $29,000 a year, for the average Georgian, $4,200 a year is crippling, especially for someone who wants to own a house down the road.
Refinancing allows people in debt to negotiate for a lower interest rate, allowing them to spend less money in the long run. However, right now refinancing through public companies can prevent individuals from loan forgiveness programs and income-based repayment options, which can then make loans more difficult to pay off.
Clinton’s plan would allow people to refinance their loans without the additional risk. The plan proposes to address debt by cutting interest rates in half, which could save the average loan borrower roughly $1,000 per year.
- Loan forgiveness
According to Clinton’s plan, individuals will never have to make payments that amount to more than 10 percent of their annual income and all remaining college debt will be forgiven after 20 years. Looking at Georgia’s average income and student loan payments, the average amount being spent is closer to 15 percent of income. Reducing payments to 10 percent could save the average Georgian an additional $1,300 per year.
Although this seems like a more tenable nation-wide plan than free tuition, most financial analysts do not believe it will be enough to fix the student debt crisis. More thorough solutions will be needed, probably at the college and state level, in order to start slowing the growing mountain of student debt.