Solving Student Loan Debt in Texas

Published 2:37 pm Thursday, October 3, 2019

Millions of college students and graduates face the financial obstacle of student loan debt each year. Throughout the country, the total amount of federal and private student loan debt amounts to nearly $1.6 trillion across 45 million borrowers. With these staggering numbers, it is no surprise that lawmakers and consumer advocate groups are working diligently to come up with a feasible solution to the student loan debt crisis. 

On a state level, however, student loan debt statistics vary widely. In Texas, the average student loan debt per borrower is $27,342 according to a recent study published by LendEDU. This average amount puts the state at 19th across all states going from lowest to highest debt figure, but some colleges and universities are doing better than others in keeping student loan debt to a lesser amount. The University of North Texas at Dallas reported an average student loan debt per borrower figure of just $6,566, down 5.5% from 2017. The University of Texas of the Permian Basin has an average debt per borrower figure of $13,445, while the University of Texas Rio Grande Valley sits at $16,129 for 2018. 

While these numbers are promising, other schools have not fared so well. Trinity University is far higher than both the state and national average, at $42,036. Texas Christian University’s average debt per borrower figure is $49,197, and Baylor University comes in at $50,172. These statistics highlight the growing need for Texas to step up and create initiatives to help student loan borrowers manage and lower their debt where possible.

Texas Should Create & Pass a Student Loan Bill of Rights
Currently, several states have enacted a student loan bill of rights in an effort to provide some assistance to college students when it comes to their student loans. These bill of rights laws create a requirement that students are provided with clear and concise information about the amount of debt they are taking on to earn a degree, how much they will owe over the course of repayment, and what repayment options are available to them after leaving school. A student loan bill of rights also lays out details of the recourse borrowers can take should a loan servicer mismanage their repayment.

Texas could create a similar law, providing student loan borrowers the information and protections needed to effectively manage their student debt over time. This would lay the groundwork for reducing the amount of debt a student takes on initially as well, given borrowers would have a better understanding of the short- and long-term impacts of debt.

And Force Student Loan Servicers to Get Licensed in the State
Another method for reducing student loan debt among Texas borrowers involves greater regulation and oversight for student loan servicers. A handful of states have enacted laws to create more stringent requirements for student loan servicers, mandating that licensing is necessary to operate a business legally. Taking this step helps keep student loan servicers accountable in terms of how they work with borrowers and how borrower payments are handled. 

With more regulation in this arena, Texas could effectively lower the amount of debt students have upon graduation. Greater oversight of student loan servicers could mean improving the protections afforded to borrowers when taking out private student loans, as well as eliminating excessive late fees or interest charges while loans are repaid. In line with a student loan bill of rights that provides added disclosure on the amount of debt a borrower is taking on, enacting a law that regulates loan servicers more closely could help college students in Texas minimize their student loan debt over time.


Michael Brown is a Research Analyst with LendEDU.