Kentuckians Under “Crippling” Financial Stress from Student Loan Debt
Tuesday, June 7, 2022
Kentuckians collectively owe more than $20 million in student loan debt, and a new informal survey sheds light on how hefty student-loan payments affect the lives of borrowers in the Commonwealth.
Research from the Kentucky Center for Economic Policy found nearly one in five residents owe student debt, including 20,000 people at or near retirement age.
Ashley Spalding, research director at the Center, said the situation is preventing many individuals from purchasing a home, starting a business, or accessing health care.
"Wages aren't going up that much, and the cost of college is skyrocketing, and interest rates have been high on these loans," Spalding explained.
The U.S. Department of Education estimates within the past year it has canceled more than $17 billion in debt for more than 700,000 borrowers. The Biden administration's pause on student-loan repayment is set to expire August 31. Experts said it remains unclear whether the pause will be extended into the fall.
Celine Mutuyemaria, a Louisville resident, said she currently has more than $100,000 in student loan debt, and said her financial situation is affecting her mental health.
"It affects me in a number of ways," Mutuyemaria pointed out. "I actually have a lot of anxiety about if and when student loan repayments are going to restart."
She added her student loans negatively affect her credit score, which is a barrier to her dream of owning a home.
"I think that homeownership feels really out of sight for me right now because of the burden of my student loans," Mutuyemaria lamented.
The White House also recently announced it would cancel the student loans of all former Corinthian Colleges students, after investigations revealed the for-profit colleges defrauded students, the most significant loan discharge by the federal government to date.
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