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Oct. 27, 2014 – Austin, Texas – Texas ranks ninth best overall in this month’s WalletHub analysis of student debt in the United States. WalletHub analyzed the 50 states and the District of Columbia across seven key metrics, including average student debt, unemployment rate and percentage of students with past-due loan balances. Compared to other states, Texas ranked above average in five of the seven metrics, including being seventh in unemployment rate for people aged 25-34, eighth in student debt as a percentage of cost of living-adjusted income, and 15th in proportion of students with debt.
“Texas’ goal is to make higher education more accessible and affordable for Texas students as they pursue education and training beyond high school,” said Commissioner of Higher Education Raymund Paredes. “The College Access Loan program is one reason why the state ranks high overall in student debt analyses. This self-supporting loan program provides a low-rate option for Texas students to cover their cost of attendance at Texas institutions.”
The College Access Loan (CAL) is part of the Hinson‐Hazlewood student loan program, which since 1965 has made approximately $2.7 billion in low‐to-no interest loans to Texas students attending higher education institutions in the Lone Star state. It was the first such program in the United States to offer state-funded, low-interest loans to students and is still the only student loan program backed by tax-exempt general obligation bonds, which have a AAA credit rating.
Due to prudent management of its loan programs, the Coordinating Board was able to lower the CAL origination fees charged to cover the cost of processing each loan. In addition the credit score requirements were revised to enable more students to access low interest student loans. CAL is administered at no cost to the taxpayer. All loan origination, servicing, customer service, and pre-default collection activities are performed by Coordinating Board staff, and the agency has never sold a loan. Collections recovery for defaulted loans has increased 238 percent over the 2008-9 average, due in part to collections being transferred to the Office of the Attorney General.
According to WalletHub, with nearly 11 percent of all student loan debt in delinquency or default and jobs still in short supply, location plays a renewed function in the size of return that higher-education investments can yield. The Federal Reserve Bank of New York reported in August that as of June 30, 2014, total outstanding student loan balances disclosed on credit reports stood at $1.12 trillion and represents an increase of $7 billion from the first quarter and $124 billion from a year ago. WalletHub reported that student loan borrowers fare better in states, such as Texas, that produce a combination of lower college-related debt levels, stronger economies and higher incomes. Results of the WalletHub study are available at http://wallethub.com/edu/best-and-worst-states-for-student-debt/7520/
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THECB Mission Statement
The Texas Higher Education Coordinating Board promotes access, affordability, quality, success, and cost efficiency in the state’s institutions of higher education, through Closing the Gaps and its successor plan, resulting in a globally competent workforce that positions Texas as an international leader in an increasingly complex world economy.
For more information contact:
Kelly Carper Polden
External Relations
Kelly.polden@thecb.state.tx.us
Office: (512) 427-6119
Cell: (541) 531-3105
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