Kentucky among states most affected by student loan debt
Published 11:12 am Tuesday, October 3, 2023
The Center Square
Millions of Americans are coming to grips with the fact their student loan bills, previously put on hold during the COVID-19 pandemic, are now becoming due, and a new report shows Kentucky will likely be affected by the resumption more than most states.
WalletHub released a report ranking the states and the District of Columbia by the impact the end of the moratorium will have on residents. Kentucky finished as the state that will be the ninth-most affected.
The study looked at a dozen metrics to determine the rankings. Among the key findings, WalletHub found that 61% of Kentucky college graduates leave school with student loan debt. That was the 11th-highest in the country. The average debt makes up more than 56% of the loan recipient’s income, the 14th-highest nationally.
Fewer Kentuckians can also take advantage of forgiveness options, according to the report. The 1.82% eligible is 17th nationally. That’s compared to Indiana, which is 31st with 2.11% eligible.
Fewer Kentuckians, though, have loans that are either past due or in default. The Bluegrass State ranked 38th in that category with less than .7% of student loans in that status.
Monica Galloway Burke, a Western Kentucky University professor and the school’s Diversity, Equity and Inclusion Fellow in the Office of the Provost, said the federal government could re-evaluate rules regarding repaying student loans.
“Specifically, there is room for improvement in loan forgiveness programs for those pursuing careers in critical fields like public service, education, and healthcare, especially in underserved areas,” Galloway Burke said. “While it is a contentious and intricate path, some countries require fewer credit hours to earn a college degree, such as a reduced number of electives, enabling students to complete degrees in three years on average, ultimately reducing costs.”
She also said states could help by expanding financial aid programs they offer students.
None of Kentucky’s neighboring states are expected to be impacted more by the resumption of student loan payments. According to the study, Ohio and West Virginia are ranked 12th and 13th, respectively. Indiana is 20th, and Missouri came in 30th.
Pennsylvania is considered the state most affected by the end of the moratorium, while Wyoming was ranked the least affected.