Student debt balances are ballooning, posing a serious threat to the financial security of millions of borrowers across the country. In the last 15 years, total outstanding student debt has grown six-fold and now hovers at over $1.5 trillion. Student debt has significant short- and long-term impacts on individuals, their communities, and the broader economy.
States have a unique role to play in addressing student loan burdens. Their role in overseeing public universities, tax and budget powers, and regulatory authority mean that they have a wide array of options to help borrowers with their student loans. No state is untouched by the student debt crisis. In 2018, the lowest state average for student debt of borrowers at graduation sat at $19,750. Twenty-one states had averages over $30,000. Solving the crisis will require solutions from a range of stakeholders and actors—and states have an opportunity to act immediately.
To provide options to states to address this growing threat to financial security, Aspen FSP conducted a scan of possible state solutions to address student loan burdens. The identified solutions fit into three types of actions that align with the borrower experience, with particular consideration for how they help low-income borrowers and borrowers of color:
- Reduce the out-of-pocket cost of attendance
- Protect students as they navigate existing debt
- Decrease existing student debt burdens