- How Much Is A Student Loan Per Month
- How To Conquer Student Loans With Extra Payments
- Average Student Loan Debt
How Much Is A Student Loan Per Month – With recent student loan borrowers owing an average of $28,565 in student loan debt, monthly payments have become a significant financial commitment that most consumers must factor into their budget for up to a decade and possibly longer.
Add a monthly student loan payment of a few hundred dollars on top of other recurring expenses, such as rent and groceries, and the narrative that today’s young Americans are in a tight financial bind comes into focus.
How Much Is A Student Loan Per Month
Surveying 6,643 respondents in 2016, the Federal Reserve estimated the average monthly student loan payment to be $393, while the median payment was $222.
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, using a pooled analysis of anonymized data from Truebill users, took the study’s premise a step further and estimated the average monthly student loan payment for all 50 states.
We then estimated how many years it would take a borrower from each state to pay back their student loan debt.
The following numbers are based on an aggregated analysis of anonymized data from Truebill users that contained nearly 150,000 unique monthly student loan payments. Disbursements are estimated to be for student loan debt through a Truebill algorithm.
A clear trend from the data is that states in the Northeast pay the largest monthly student loan payments on average.
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For reference, the nationwide average student loan payment was $210.73. 17 states had a figure higher than the US average, while 33 states had a lower average.
The Northeast Corridor has become an area of prosperity due to the abundance of high-paying jobs in major cities such as New York City, Washington D.C., Philadelphia, Boston and Baltimore. Residents of these cities may be able to attack student loan debt more aggressively without completely breaking the bank because of their higher wages.
Indicative of the high monthly student loan payments made in the region, the following map shows a pocket of deep blue in the northeast.
The map above also shows lighter shades of blue in both the south and west. States in these two regions tend to pay less student loans, according to the data.
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The state of Wyoming had the lowest average monthly student loan payment at $176.46, joining other western states such as:
Moving back toward the East Coast, Louisiana has the smallest average student loan payment among states in the South: $192.62. Louisiana’s monthly payment size ranks 46th and the state is joined by other regional members including:
While the prosperity of the Northeast can be considered a reason why the region made larger student loan payments, the opposite can be said for the South, which is generally thought to be the least prosperous area of the United States. Southerners may have a hard time affording large student loan payments with all of life’s other expenses and lower incomes.
Western states that make smaller monthly student loan payments are a little more difficult to understand, as that region teeters in the middle when it comes to wealth.
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The following numbers are based on an analysis that incorporated insights derived from an aggregated analysis of anonymized data from Truebill users with data from our annual Student Loan Debt by School by State report showing the average student loan debt in each state. The two data points for each respective state were plotted to estimate how many years it might take a borrower to pay back their student loan debt.
This analysis assumes that the monthly student loan payments remained the same until all student loan debt was paid off. It also assumes that a borrower remained in the same state from where they went to college until the debt was fully repaid. The monthly payments are estimated to be for student loan debt through a Truebill algorithm.
While many states in the West made some of the smallest monthly student loan payments, this region still dominated the top of the list when we ranked states by how quickly borrowers could repay their student loan debt in full.
With an estimated student loan debt payoff time of 8.14 years, Utah had the fastest payoff time. But other states in the West were not far behind, including:
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On the other end of the spectrum, Northeast states tended to rank unfavorably in terms of estimated student loan repayment time. At 14.40 years, New Hampshire had the longest tenure among the 50 states, joining:
On a national basis, the estimated repayment period for student loan debt was 11.30 years. 19 states had a payback period that was shorter than 11.30 years, while the payback period for the remaining 31 states was longer. To find the payoff time in the United States, the nationwide average student debt per borrower of $28,565 was used.
California had the highest overall ranking between the two respective tables included in this report. The Golden State paired the fifth-largest monthly student loan payment size ($221.17) with the second-fastest payback time (8.49 years).
Much of why California performed so well in this analysis can be attributed to the state’s low average student loan debt per borrower, which was $22,530 and the fourth lowest among the 50 states.
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By pairing low average student loan debt with the surplus of high-paying jobs due to the booming tech industry in Silicon Valley, California has created an environment extremely favorable for student loan debt repayment.
The biggest factor in determining how long it will take borrowers to pay off their student loan debt appears to be how much they owe, not how much they pay each month on that debt.
If you sort the second table in the “Average Student Loan Debt” column from lowest to highest value (by clicking on the column header until it sorts in ascending order), you’ll see that many of the states with the fastest repayment times remained at the top of the list because their average debt was also on the lighter side.
Conversely, if you sort the same table by the “Average Monthly Student Loan Payment” column from highest to lowest value, you’ll see that many of the states that had the highest average monthly payments still ranked poorly in terms of repayment time.
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Also, many of the aforementioned northeastern states that ranked so highly for their monthly student loan payments had some of the longest repayment periods due to the average student loan debt per borrower in those states being in the low to mid-thirties.
The range from lowest average monthly payment to highest ($176.46 – $229.02) was much smaller than the range from lowest average student loan debt to highest ($19,742 – $38,776). The former was a difference of 26%, while the latter was a difference of 65%.
For so many young adults, student loan repayment is a huge financial burden, as the data in this report indicates.
To make the repayment process as painless as possible, there are certain strategies to consider. list some below.
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If you have student loan debt from federal student loans, there are quite a few student loan repayment plans you can implement. The most common is the 10-year standard repayment plan, but there is also the graduated repayment plan or the extended repayment plan.
Other federal student loan repayment plans include income-driven repayment plans, which only require that your monthly student loan payments be a reasonable percentage of your income.
If you have private student loan debt, there aren’t that many repayment plans you can use, but you may be able to figure something out if you communicate with your lender.
Whether you have federal student loan debt or private student loan debt, student loan refinancing can potentially help you save money by securing a lower student loan interest rate.
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You can also refinance your student loans more than once, which makes it possible to get even better terms than before. In addition, you can refinance parent PLUS loans to potentially help save money on interest or transfer the loan entirely to your child.
Another student loan repayment trick you can implement is to make student loan payments bi-weekly at half of your monthly payment instead of one payment per month. Over the course of a year, you’ll end up making 13 months of payments instead of 12, which should help you pay off your student loans faster.
It also helps to think about which student loans you should pay off first, as you probably have some student loans with a higher interest rate than others.
Most of the data that can be found in this report comes from an aggregated analysis of anonymized data from Truebill users, which included nearly 150,000 student loan payments from 2015 to 2019. The payments are calculated to be for student loan debt through a Truebill algorithm that uses certain criteria for estimating what the payments are specifically intended for.
Average Student Loan Debt
The first table and map in this report came from the aggregated analysis of anonymized data from Truebill users, and the state averages were found by simply sorting the data by state and averaging the respective numbers. This data is used in the second table in the same
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