Mike Brown Brown is a research analyst for LendEDU, a website that helps consumers discover and compare financial products, including student loans.
Student loan debt has spiraled out of control across the country, and Virginia is no exception.
Borrowers across the United States are experiencing an unprecedented student loan debt crisis. Student debt in the United States has grown rapidly over the past decade, according to Bloomberg, from $675 billion in 2009 to $1.52 trillion in 2019. According to LendEDU data, 60% of recent graduates struggle with student debt, averaging $27,975 per borrower.
LendEDU has produced a Student Loan Debt by Decade report examining changes in student loan debt numbers between 2007 and 2017 at nearly 1,000 different US colleges and universities. And based on the report, Virginia hasn’t done particularly well when it comes to student debt growth over the past 10 years.
Over the past 10 years, Virginia has had some of the worst student loan debt numbers.
Virginia experienced a 61.31% increase in average debt per borrower between 2007 and 2017. Seeing average debt rise from $18,184 in 2007 to $29,333 in 2017, the state has ranked 46th out of 50 states and Washington DC in lowest debt ranking. mostly growing.
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Additionally, the percentage of graduates with student loan debt in Virginia rose from 55.52% to 55.76%, a 0.23% increase that ranks it 30th in the nation.
How have some institutions in Virginia handled student debt?
Many schools in Virginia have seen their average student debt increase over the past decade. Here’s how the four largest schools in Virginia fared:
1. Liberty University’s average debt per borrower increased 21% from $18,078 to $21,875 from 2007 to 2017. Liberty University’s percentage of graduates with debt also increased from 56% to 61%.
2. George Mason University’s average debt per borrower increased by 84.11% from $16,705 to $30,755. The percentage of college graduates with debt also increased by 7%.
3. Virginia Commonwealth University’s average debt per borrower increased by 55.95% from 2007 to 2017, and its percentage of graduates in debt increased from 64% to 62%.
4. Virginia Tech’s average debt per borrower increased 49.54% from $20,209 to $30,221. The university was able to reduce its percentage of graduates in debt from 53% to 49%.
Hampton University did the worst in both categories, increasing its average debt per borrower by 836.38% from $3,645 to $34,131, while increasing its percentage of graduates in debt from 28% to 75% .
What can be done to improve the student debt situation in Virginia?
Virginia has already taken some steps to reduce the state’s student debt situation, but more work can be done.
A new office has been created to help control debt in this area: the Office of the Qualified Student Loan Ombudsman. There is a very first student loan advocate, Scott Kemp, who will help borrowers with any problems that may arise or have already arisen, in addition to educating borrowers on various financial aids. The office will also investigate and resolve complaints from borrowers.
In addition to this newly created office, Virginia also has several financial aid programs that attempt to educate the general population as much as possible about their various options. From federal student loans to private student loans to how repayment works, these programs can help borrowers better understand what they’re getting into before they take on debt.
But more help is needed. Here are some examples:
There are many programs that other states have implemented to reduce debt, and Virginia may benefit from trying to do the same. These strategies could help reduce total student debt in the state of Virginia, which in turn would help the economy, taxpayers, and more.
- Incentivize companies to offer benefits for the repayment of student loans
This program would incentivize businesses to help repay student loans by making these funds tax-free at least at the state level or by subsidizing them through corporate tax breaks.
- State-Based Student Loan Programs
Virginia does not have unique student loan programs. By adding state-based student loans, it would help Virginia residents get loans with lower interest rates and better options in times of financial hardship.
In addition to having the ability to offer state-based student loans, Virginia could also expand loan forgiveness programs, while creating its own refinancing authority.