As per the study by the New York State Comptroller, in the last decade, the chunk of education debt burden has more than doubled in New York. During the end of 2015, the average state citizen had $33,400 in the form of student loans, which is even more than the average education debt in the nation, which is slightly under $31,000. The student loan obligations in the state have seen a considerable rise ever since the last 10 years.
The total student loan delinquencies as in 2006 were $39 billion in New York and the same statistic at the initial half of 2016 was at $82 billion, which is a steep rise of 114%. To say the least, the total residents in New York with huge amount of obligations rose to 43%, which accounts for 28 million people. Research reveals that a total amount of $725 billion in obligations is owed in New York and among that, student loans account for 12.4%.
What factors drive the burgeoning level of student loan debt?
Statistics on student loan debt don’t comprise of other debts which individuals and households accrue to pay for education like borrowing money from workplace retirement funds, taking out home equity loans or using credit cards. The foremost reason behind the spurring student loan debt is soaring college fees which were one of the most talked-about factors. From 2005-2006 throughout 2014-2015, average tuition costs and fees for 4-year colleges and institutions saw a rise of 50% or more for both private colleges of New York.
During the year 2005-2006, the average fees for UG tuition fees in New York at a federal college was $14,285 as against $20,564 in 2014-2015. While student loan obligations of individuals vary considerably among New York localities, the study also found out that borrowers with higher balances on loans were concentrated more in the interior areas. The magnitude of education loan defaulters in New York who were either 90 days late or more than 90 days late on their payments rose alarmingly over the last decade. The proportion of defaulters with untimely payments rose from 9% in 2006 to 15% by 2012 but it dropped down to 13% in 2015. The span of decrease from the year 2012 to the year 2015 was twice of that which was seen in the country at the same time span.
This kind of heavy debt has had a dragging impact on the broader economy which makes it tough to pay for daily necessities for the recent graduates. From different walks of life, New Yorkers have found higher education as the only path to accomplish a satisfying and a secured life. But as there are too many taking out student loans that face real difficulties in repaying their debts, New Yorkers often have to make the decision of pushing off their future saving goals or home-buying dreams. This kind of burden of student can create ever-lasting financial challenges for the borrowers. Not only do the individuals and families bear the brunt, the economy of the state also has to face challenges.