Are MD students able to repay their college loans?

Maryland college students in most parts of the state have lower student loan delinquency rates than the national average, according to new data from the Federal Reserve. However, some counties have much higher delinquency rates - up to 25 percent or more.

Click to enlarge

The current issue of the Federal Reserve Bank of Richmond’s 5^th District Footprint publication focuses on the rates of student loan delinquency (the number of student loans that are at least 30 days late) as of March 2013 for the region comprised of Maryland, North and South Carolina, Virginia, Washington D.C., and West Virginia. The study finds that delinquency rates in most of the region’s counties differed little from the national norm, but for those counties with higher rates, nearly all had median household incomes below national and state median levels, as well as higher than average rates of poverty and unemployment for its college graduates. Nationally, the rate of student loan delinquency is currently 11.8 percent (up 2.3 percent from last year), with the average student holding $24,755 in this difficult to discharge form of debt.

The issue of student loans is especially salient now because if Congress does not act to prevent it, the interest rate on subsidized Stafford student loans will double on July 1st, rising to 6.8 percent. According to a report recently released by the Maryland Public Interest Research Group, the average Maryland student graduates with over $24,000 in debt, and this rate increase would cost Maryland students over $95,469,000, amounting to roughly $900 per student, per loan. This hurts students from lower-income families, as only students from families with incomes less than $50,000 are eligible for these subsidized Stafford loans.