Student loan forgiveness plan can barely dent Granite Staters’ record debt

In New Hampshire, average owed is $39,950 – highest in the nation
Student Debt Pic

Alessandro Morales graduated with over $100,000 in debt from the University of New Hampshire this past May. (Courtesy photo)

Alessandro Morales’s plan after graduating from the University of New Hampshire was to move on to graduate school to pursue a career in public education. However, the expenses of obtaining his first degree made him pause on his path to pursuing a second.

Morales graduated in May with $82,000 in private and $20,000 in federal loans after paying in-state tuition for four years. UNH has one of the highest costs of attendance for public universities in the country, costing New Hampshire students more than $35,000 a year in tuition and fees before financial aid.

Even if President Biden’s student debt relief becomes reality – with up to $10,000 in cancellation for those who make less than $125,000, and $20,000 of loan forgiveness for Pell Grant recipients – the vast majority of Morales’s debt will remain even though he qualified for a Pell Grant his freshman year.

“While $20,000 sounds significant for many graduates, that only covers a fraction of overall loans,” he said. “People such as myself who have private loans are unaffected by federal loan forgiveness.”

Morales now works as a teller at TD Bank to chip away at his debt before he applies to graduate school. He’s hoping to start an advanced degree program in the fall of 2023, financing it primarily through stipends and other grants.

He’s already using his paycheck to chip away at the debt he built up earning his history degree.

“Even with a higher hourly pay than most jobs, I’m struggling to cover student loan payments plus other living expenses,” he said.

Morales is not alone. In New Hampshire, 70 percent of graduates from all colleges and universities have student debt, which is the second-highest rate in the nation.

The Granite State – which contributes the least to higher education among all states – also has the highest average student debt in the nation at $39,950. These factors combine to create a young working class in the state that has less money to buy cars and houses and to start families.

In-state tuition costs

When Daisy Young applied to college, she thought of UNH as a backup option to the other five or six schools where she applied.

But when she priced out the cost of attending college, knowing she would have to take out and repay loans on her own, it still turned out to be her most affordable option.

“We’re kind of right in that in between where we can’t actually afford to pay expected family contribution that FAFSA wants us to, and then we don’t get enough money from the schools to actually be able to go,” she said. “So I just couldn’t afford the other schools.”

Young, who is a senior at UNH, will graduate in May with about $30,000 in federal loans.

New Hampshire is a notoriously expensive state for residents, like Young, to obtain a four-year undergraduate degree. The average cost of annual attendance for public universities in the state is $29,222, according to the Education Data Initiative.

At the University of New Hampshire’s main campus in Durham, in-state tuition along with room and board is $31,700. Including transportation, books, supplies and other expenses, the cost of attendance is estimated to be $35,350.

Even though the University System of New Hampshire froze in-state tuition for the fourth year in a row, it still has one of the most expensive in-state price tags.

With the costs of in-state tuition exceeding the national average, about 44 percent of New Hampshire residents attending college choose to pursue their degrees at out-of-state schools. Just 25 percent of college students in the state grew up here. This is an issue for an aging state filled with businesses desperate to hire new employees.

It’s also an issue with differing opinions on how to keep graduates here.

In 2019, a college graduate incentive program was established by law without the governor’s signature. Employers who participate in the program agree to pay new employees at least $1,000 a year for the first four years of their employment for starting their career here.

Gov. Chris Sununu, however, refused to sign the bill. His solution to graduate retention was a budget proposal of $16 million in student debt assistance and a workforce recruitment program.

With Biden’s forgiveness plan, New Hampshire residents are split on favorability. In a UNH poll, 45 percent of respondents said they supported the plan, while 49 percent disapprove.

Yet 63 percent of respondents aged 18 to 34 support loan forgiveness. This is often the demographic paying off debt, as many payment plans are across 10- or 20-year periods.

Degrees of debt

Based on Biden’s proposed relief plan, Young would see up to $10,000 in aid.

“The student loan forgiveness, would apply to me and it would definitely be helpful,” she said. “On top of other loans, like I have car loans that I pay off, it is definitely intimidating.”

At the University of New Hampshire’s main campus, graduates left Durham with an average of $45,775 in debt in 2019-20, according to The Institute for College Access and Success. Three-quarters of all graduates left school with some amount of debt.

At UNH-Manchester, 68 percent of graduates left school with an average debt of $29,588.

Beginning in 2017, the University System of New Hampshire introduced the Granite Guarantee, which ensures that any first-year student from New Hampshire who is eligible for a Pell Grant will pay no tuition.

When the program was introduced, it was estimated that 21 percent of all New Hampshire undergraduates were Pell-eligible. In 2017, UNH expected the Granite Guarantee would help 285 students.

Currently, UNH officials say the program is helping more than 800 students.

Even with programs like the Granite Guarantee, the idea of debt is hard to grasp for young students beginning their undergraduate degrees, said Young. Now, with her upcoming graduation, she’s facing the reality of the choices she made four years ago.

“I don’t think you really understand what $30,000 in debt is when you’re 18,” she said. “Now, I’m looking back regretting those decisions.”

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