The average balance for federal and private student loan borrowers in Louisiana is $33,823, 8% lower than the U.S. average of $36,689.
Although several bills were introduced in Louisiana in 2020 to protect student loan borrowers, only one has passed as of the end of January 2021, prohibiting public colleges from withholding student services for financial reasons. It’s a step in the right direction, but more protection is needed for the 600,000 state residents who have taken out loans for school.
Here’s what else you should know about student loans in Louisiana.
Student loans in Louisiana: Borrowers owe average of $33,823 in federal, private debt — and more facts
When it comes to college options, Louisiana has plenty for students to choose from. For example, there are four major public college systems in the Pelican State:
- University of Louisiana System
- Louisiana State University System
- Southern University System
- Louisiana Community and Technical College System
There are 29 campuses spread across those systems.
In general, keeping costs low means going for one of those public colleges. Another way is taking advantage of state grants and scholarships. On that front, the state provides a substantial number of options, including:
- Taylor Opportunity Program for Students
- Rockefeller State Wildlife Scholarship
- Chafee Educational and Training Voucher Program
- Strategies to Empower People (STEP) Vocational Education Program
- YCP: GO Youth ChalleNGe Program
- GO Grant
- Regional Contract Program
- BESE Tuition Program for Teachers
These offerings could help explain why the state’s students have less student loan debt than the average American college grad.
Student loan debt in Louisiana’s largest parishes, from East Baton Rouge to Orleans
Student loan debt by ZIP code in Louisiana’s 2 largest cities: New Orleans and Baton Rouge
Loan repayment programs for Louisiana residents
Louisiana has repayment programs that benefit professionals, such as lawyers and health care workers. There are also federal loan forgiveness programs available to those borrowers.
Federal student loan repayment programs
Those who have federal student loans may be eligible for one of several repayment programs that lead to forgiveness, including:
Income-driven options cap payments based on your annual earnings, and anything owed after 20 or 25 years (depending on the plan) is forgiven. Be aware, though, that you do have to reapply each year to stay on an income-driven repayment plan, and you could be taxed on the balance that’s forgiven.
With PSLF, you’d earn forgiveness after 120 eligible payments — but it’s only available to those who are employed by a federal, state, local or tribal government or a nonprofit organization. Plus, in addition to other requirements, you have to have direct loans (or consolidate other federal student loans into a direct loan). However, you won’t have to pay tax on the amount that’s forgiven with PSLF.
On the other hand, Teacher Loan Forgiveness applies only to those who teach full time for five consecutive academic years in a low-income school or educational service agency. It caps forgiveness at $17,500 or $5,000, depending on the subject you teach.
John R. Justice Student Loan Repayment Program
The John R. Justice Student Loan Repayment Program is available to state and federal public defenders and state prosecutors employed in Louisiana, provided they meet the requirements, including staying in that job for at least three years.
To be eligible, you need to have at least $20,000 in eligible student loans (including federal loans such as direct loans, Perkins loans and FFELP loans) which are not in default and work at least 30 hours a week. A total of five public defenders can get $3,900 a year, while 10 assistant district attorneys are awarded $1,950 a year.
Louisiana Bar Foundation Loan Repayment Assistance Program (LRAP)
Another option for those who go into law after graduation, the Louisiana Bar Foundation LRAP offers up to $5,000 in financial assistance to those who have law school debts. The program maxes out after 10 years and cannot exceed 75% of the annual debt service on the eligible loan.
To qualify, you have to be a member of the state Bar Association, earn $65,000 or less a year and be employed by a nonprofit legal organization assisting low-income individuals. Per IRS guidelines, your annual income can be adjusted down if you have dependents.
Louisiana State Loan Repayment Program (SLRP)
Qualifying primary care providers serving in health professional shortage areas can take advantage of the Louisiana SLRP. Among other requirements, you have to work for a public or nonprofit entity, accept assignments of Medicare or Medicaid and have no other obligation for health professional services to qualify.
The program will repay governmental or commercial educational loans for $15,000 to $30,000 a year, for a three-year commitment, depending on professional type. Participants in good standing may be able to renew for an additional two years.
Louisiana federal student loan borrowers younger than 25 owe less than national average — and more comparisons
How to refinance student loans in Louisiana
A significant 7.1% of borrowers in Louisiana owe $100,000 or more in student loans. Refinancing could be an advantageous option to minimize loan costs, particularly for those high-debt borrowers.
For Louisiana residents with excellent credit, refinancing — which can combine multiple loans and potentially give you a lower rate — can be worth considering. Lela RefiHELP, for example, is a program available to state residents through the Louisiana Education Loan Authority. Those who qualify can refinance loans ranging from $5,000 to $175,000 at a fixed rate. (You’ll need a FICO Score of at least 690 to qualify.) There are also national refinancers that can provide solid options. Be sure to review the full terms and requirements before applying to make sure it’s a good option for you.
In general, the process is simple: Shop around for your best rates and terms, pick your ideal lender and apply. You’ll need to provide basic information, including existing loan details and proof of income and identity, though requirements will vary by lender. A credit check will be done to ensure you’re qualified. If approved, the refinancer would pay off your existing loan, or loans, and issue your new loan. From there, you’d start making payments under your new terms.
Borrowers should be aware that refinancing is only available through private lenders. That means that if you refinance federal loans, you’d lose access to federal programs like income-driven repayment and loan forgiveness. Some private lenders will still offer forbearance and deferment, but the offerings will likely differ from what’s available for federal loans. While refinancing can be ideal for those with private student loans, weigh any potential consequences before applying.
- U.S. Department of Education data as of June 30, 2020
- Anonymized My LendingTree June 2020 credit reports
- Federal Reserve Bank of New York Consumer Credit Panel/Equifax as of June 2020
Because the latter data is from 2015, researchers estimated the increase in student loan debt per borrower in the state using statewide data from anonymized credit reports.
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