Student loan debt is one of the drivers behind a lifetime of financial difficulty and potential bankruptcy proceedings. If student loan debt is causing problems for you and your loved ones, please call me.
Reprinted from The Columbus Dispatch:
Ohio ranks first — that is, the worst — in the country on an index that calculates the burden of student debt based on 10 measures of indebtedness and earning opportunities.
Ohio was followed by Mississippi and Pennsylvania, according to an index created by personal-finance website WalletHub. The Buckeye state earned a score of 64.25 on a 100-point scale, with points effectively being demerits. Hawaii had the best score with 14.44.
Most of the weight of the index comes from student-loan indebtedness.
That section includes average student debt, the proportion of students with debt, student debt as share of income and share of student borrowers who are 50 and older.
The second portion of the index addresses grants and student work opportunities. It includes unemployment rates of those 25 to 34, availability of student jobs and availability of paid internships.
“Ohio has the 10th highest average student debt at over $30,000 per student (class of 2015). Currently, two-thirds of all students have student-loan debt, which is one of the highest proportions in the country,” said Jill Gonzalez, WalletHub analyst and Ohio State University graduate, in an e-mail.
“It doesn’t help that 8 percent of Ohio’s residents age 50 and older still have student loans, also one of the highest percentages in America. All of these factors, as well as a fairly high unemployment rate among the population age 25 to 34 of 5.6 percent, contribute to Ohio’s No. 1 rank.”
The 12.95 percent student-loan default rate, coupled with the jobless rate in that age group, suggests that recent grads are struggling to repay their loans, she said.
The report is the most recent to document the burden of student debt in Ohio.
In late June, Attorney General Mike DeWine’s office released a report showing Ohio is eighth in the nation when it comes to college graduates with student loan debt. It noted that two-thirds of Ohio students leave school with debt, similar to the WalletHub report.
“This is a national crisis, really,” DeWine said at the time. “We have so many students who are leaving college with enormous debts.”
Dan Tierney, a DeWine spokesman, said the key for students and their families is to find ways to borrow less money for college.
“If you take out less of a loan and don’t need as much, it is easier to make loan payments on the back end when you graduate,” he said.
The problems with student debt could end up creating broader economic issues in the state down the road, Gonzalez said.
“In this sense, it might forecast some additional economic hardships down the road, including low homeownership rates,” she said.