Laura Fields | May 23, 2024
Edited by Hannah Locklear
Summary: Student loan debt has increased substantially in the US, and with it, economic problems have arisen, including lack of retirement savings, reduced spending, delayed marriage and child rearing, etc. If you're struggling with student loan debt, you can resolve your debts with the help of SoloSettle.
Student loan debt is necessary for some people to gain a higher education, but it comes with a hefty personal price tag and potential negative effects on the economy.
In this article, we’ll explore the effects of student debt on the US economy, the reasons for student loan debt, and the positive impact of avoiding it altogether.
Sued for student loan debt? Settle the debt before going to court with the help of SoloSettle.
At the end of 2022, the Federal Reserve reported $1.76 trillion in private and federal student loan debt in the United States. This number has steadily increased over the last ten years since 2011. Here are some other interesting statistics regarding US student debt:
In response to the rising student debt numbers, the Biden Administration announced a plan to cancel or reduce federal student loan debt balances beginning in August of 2022. Even with this forgiveness plan in place, the economic effects of student debt are still evident.
Let’s have a review of some of the impacts that are created due to student loan on the US economy:
These are just a few of the negative effects of student loan debt on the economy. But more importantly, student loan debt negatively affects individuals. It can cause great stress, prevent and delay important life milestones, and even scare some students away from pursuing a higher education in the first place.
The table below outlines the average student loan debt in each state throughout the US.
State | Average loan balance |
---|---|
Alabama | $35,848.13 |
Alaska | $34,055.73 |
Arizona | $34,693.64 |
Arkansas | $32,188.84 |
California | $36,755.80 |
Colorado | $35,932.11 |
Connecticut | $34,713.76 |
Delaware | $36,135.11 |
District of Columbia | $54,708.52 |
Florida | $37,709.72 |
Georgia | $40,268.87 |
Hawaii | $36,238 |
Idaho | $32,228 |
Illinois | $37,233 |
Indiana | $31,483 |
Iowa | $29,350 |
Kansas | $31,502 |
Kentucky | $31,685.24 |
Louisiana | $33,376.54 |
Maine | $32,679.74 |
Maryland | $42,350.91 |
Massachusetts | $33,710.38 |
Michigan | $35,253.08 |
Minnesota | $32,513.98 |
Mississippi | $35,381.31 |
Missouri | $34,412.96 |
Montana | $32,414.91 |
Nebraska | $30,978.93 |
Nevada | $33,663.96 |
New Hampshire | $33,119.66 |
New Jersey | $35,202.31 |
New Mexico | $33,550.79 |
New York | $37,196.72 |
North Carolina | $36,632.59 |
North Dakota | $27,874.56 |
Ohio | $33,490.59 |
Oklahoma | $31,011.14 |
Oregon | $36,230.49 |
Other | $44,150.11 |
Pennsylvania | $34,535.56 |
Puerto Rico | $29,480.74 |
Rhode Island | $31,779.66 |
South Carolina | $36,729.04 |
South Dakota | $29,798.42 |
Tennessee | $35,431.18 |
Texas | $32,285.33 |
Utah | $31,861.93 |
Vermont | $37,037.04 |
Virginia | $38,251.37 |
Washington | $35,223.26 |
West Virginia | $31,121.28 |
Wisconsin | $30,777.92 |
Wyoming | $30,360.53 |
Forbes |
This table shows the average loan balance is the highest in the District of Columbia, Maryland, Georgia, Florida, and Illinois. On the other hand, the five states with the lowest average student debt are Kentucky, Kansas, Indiana, Nebraska, and Iowa.
The table below shows how different age groups are affected by student loan debt.
Age Group | Amount Owed | Number of Borrowers |
---|---|---|
24 or below | $110 billion | 7.6 million |
25 to 34 | $500 billion | 14.9 million |
35 to 49 | $622 billion | 14.4 million |
50 to 61 | $282 billion | 6.4 million |
62 and older | $98 billion | 2.4 million |
Forbes |
As the table illustrates, people who are 35 to 49 years in age account for the highest number of student debt with 14.4 million borrowers owing $622 million. Therefore, according to this data, middle-aged people are mostly affected by student loan debt.
Most students take out a loan to gain an education which opens the gateway to better employment opportunities.
As such, there are several reasons why US students and graduates have accumulated so much debt in pursuit of higher education. Here are a few reasons why US students are in debt:
As a developed country, the US
While getting a degree is beneficial, consider the cost. In an ideal situation, you’d want to avoid student debt while also pursuing higher education. Doing so can have the following positive outcomes:
That being said, we realize that some people must take out a loan in order to attend college. There are still smart ways to stay on top of your finances while also paying back your student debt.
If you’ve fallen behind on your student loan payments, there is a chance you’ll be contacted by debt collectors. If you ignore their calls, you might find yourself tangled up in a debt lawsuit. If you know the debt is valid, debt settlement may be a good option to help you get back on track.
Debt settlement involves working with creditors, lenders, and debt collectors to negotiate a lump-sum payment, and sometimes a payment plan, that is less than the original debt amount to satisfy the obligation once and for all.
SoloSettle, powered by SoloSuit, makes debt settlement simple. Our software helps you send and receive settlement offers until you reach an agreement with your creditor. SoloSettle also helps you manage your debt settlement agreement documentation and transfers your settlement payment so you can keep your financial information safe from sketchy debt collectors.
Watch the following video to learn more about how to settle a debt.
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)
>>Read the MSN story about how SoloSuit can help you settle your debt
Here's a list of guides for other states.
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Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
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