Mississippi Student Debt Grows at 9th Fastest Rate in US Here’s What Can Be Done

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Across the country, more than 45 million borrowers owe $ 1.52 trillion in student loan debt. These statistics have grown exponentially over the past decade, and in Mississippi, the upward trend is even more exasperated than the national average.

The state became the ninth fastest in terms of average student debt per borrower with an increase of 58.50% from 2007 to 2017. Based on data analyzed by LendEDU, Mississippi borrowers in 2007 graduated with an average student debt of $ 19,134. In 2017, that number increased to $ 30,328.

Mississippi ranked ninth in average student debt per borrower, with an increase of 58.50% from 2007 to 2017.

Over the past decade, rising student loan debt balances have been a source of concern for parents, students and lawmakers. Having tens of thousands of dollars in debt upon leaving college limits a graduate’s ability to contribute to other financial goals and to the economy in general. Student loan borrowers may not be able to buy a home as quickly as they would like or save for an emergency or retirement.

This has as much impact on the economy of the state as it does on that of the nation. In Mississippi, the student debt problem must be addressed so that graduates have the opportunity to achieve other goals during their lifetimes without being hampered by outrageous student debt balances.

Why Student Debt Is Growing So Fast in Mississippi

Over the past decade, Mississippi graduates have had to take on more student debt each year. In 2007, 49.14% of students needed financing for their studies, while in 2017, 58.01% depended on student loans to obtain a degree. The average student loan debt balance has increased by more than $ 11,000 per borrower, creating an urgent need to limit the burden of student loans on Mississippi graduates.

Some colleges and universities have done well in minimizing the need for student debt, such as Blue Mountain College, which has an average debt per borrower of $ 19,084. However, others experienced significant increases over the ten-year period. Alcorn State’s figure increased by $ 25,680, from $ 10,000 in 2007 to $ 35,680 in 2017; while Millsaps College’s figure also increased significantly, from $ 21,495 to $ 33,569.

These numbers suggest that Mississippi students are having difficulty affording college without student loans. Part of the problem may be that Mississippi is known as a low-income state, compounded by the rising cost of earning a degree among state colleges and universities.

What Mississippi Can Do to Help

In recent years, various states have experimented with a number of different measures to reduce reliance on student loans so that young adults can graduate from college without incurring insurmountable debt. Mississippi may be able to improve its student loan debt situation by trying out a few of these ideas within the state.

State-based student loan programs

Mississippi has a handful of state-based student aid programs for students attending state colleges, primarily focused on the potential forgiveness of student debt for certain career paths. Specifically, nurses and teachers have access to student loan cancellation programs through Mississippi Financial Aid, but more can be done to expand these programs to more students. Adding career paths that can qualify for student loan forgiveness could reduce the post-graduation debt burden for many Mississippi students.

Limit the cost of college education at MS colleges and universities

One of the most impactful changes Mississippi could implement at the state level is to limit the cost of colleges and universities. Capping tuition fees would help reduce the amount of funding a student needs to graduate. These limits could extend to Mississippi residents initially, making college more affordable both initially and in the long run.

Mandatory financial aid courses / seminars in high school and college

Some experts suggest that a lack of financial literacy surrounding student loans has resulted in an increase in the amount of debt graduates carry with them after college. Creating an initiative that charges financial aid courses not only on new students, but also on high school students planning to go to college, could help alleviate some of that burden. Classes and seminars could focus on how student loans work, their repayment, alternatives to student loans like grants and scholarships, and the impact of accruing interest on loans while a student is studying.

Subsidize student loan payments for MS residents

The state might also consider subsidizing student loan payments for Mississippi students and graduates. It may look like soft loans offered by the federal government, where interest accrued during periods of deferment is paid by the Department of Education. The state may consider offering additional subsidized loan programs to resident students, or a program that helps cover part of the interest costs for students who remain in the state to work after graduation. .

Implementing one or more of these strategies for Mississippi students and graduates could significantly reduce the need for student loans and help reduce the burden of student debt after leaving school.

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Mike Brown is a research analyst at LendEDU. It uses data, usually from surveys and publicly available resources, to identify emerging personal finance trends and tell unique stories.

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