Scuttlebiz: Augusta area No. 8 in nation for student loan debt

Augusta Chronicle |

--On the surface, student loans aren't a bad deal.

Financing education is considered an investment in the future. Those with college degrees, technical training and other forms of higher education generally out-earn those with only a diploma.

The deal generally will work out for you, unless your future doesn't turn out like you thought it would. Then, those student loans can become a financial ball and chain.

More than 44 Americans owe about $1.6 trillion in student loan debt, much of which is through federal (i.e. taxpayer-backed) programs. Many graduates -- and most non-graduates -- struggle to pay the debt.

And a recent study suggests Augusta-area student-loan payers might be struggling more than others.

Augusta has the eighth-highest median student loan balance out of the nation's 100 largest cities, according to Student Loan Hero, a division of the online finance company LendingTree.

Metro Augusta's median student loan balance is $26,542, almost $4,000 higher than the $22,763 national average, based on LendingTree's national review of 485,000 anonymized credit reports listing student loan debt.

Residents of Washington, D.C., carried the most student debt -- $29,314. Those in McAllen, Texas, had the least -- $13,641.

Other cities in the top 10 are Atlanta ($28,706); Charleston, S.C. ($27,591); Akron, Ohio, ($27,363); Columbia, S.C. ($27,330); Raleigh, N.C. ($26,779); Toledo, Ohio, ($26,693); Birmingham, Ala. ($26,372); and New Orleans ($26,182).

So what puts Augusta in the top 10?

Kali McFadden, a senior research analyst at Student Loan Hero, believes the primary culprit is metro Augusta's median household income, which is 16% below national average.

"With reduced earning opportunities, borrowers may be accruing interest faster than they are able to pay it off, either through income-based repayment plans or through missing payments altogether," she said.

Although the number of area residents over 25 with bachelor's degrees -- 25.3% -- is lower than the national average of 32%, more people in Augusta are likely to attend college but not finish -- 21.7% compared to 20.8% for the rest of the nation.

That situation, she said, "is a really bad place to be."

"In other words, they've assumed at least some debt, but don't have the degree that leads to higher income," McFadden said.

I posited the theory that high-cost tuition at Augusta University's medicine and science programs could be skewing the area's figures, but McFadden pointed out the percentage of people in Augusta with graduate and professional degrees is actually lower than the national average -- 9.4% compared to 11.8%.

However, she said it's possible some with hefty graduate school debt are purposely making low monthly payments in anticipation of having their debt erased through the Public Service Loan Forgiveness Program.

The program, created by the College Cost Reduction and Access Act of 2007, can erase college debts for people who have made at least 120 payments and take a job with a nonprofit or government agency.

Sounds like a great deal...for everyone except the poor schmuck who underwrites the student's past debts and -- at least in the case of government workers -- future earnings.

Whatever happened to the days of just repaying what you borrow?

I wonder if a better debt-repayment solution might be structuring student loans so interest rates vary with risk, as with nearly all other types of loans. The rate could be set based on the likelihood of the borrower's expected ability to repay through gainful future employment.

For example, people who want to be a nurse -- a lucrative and in-demand occupation -- would get a low 2% rate. Those planning to study, say, sociology, art history and political science would pay 7% interest to dissuade them from racking up debt to become a barista or bartender. People seeking knowledge that is worthless outside the campus walls -- transgender studies, philosophy, etc. -- could pay prime-plus-15%.

A market-driven sliding scale might might solve the worker shortages that exist in many labor markets.

At any rate, Augusta was the fourth-highest of the top-10 cities where borrowers owed more than $100,000 in debt -- 12.1%. Only Washington (14.8%), Atlanta (13.2%) and Columbia, S.C. (13.1%) had more six-figure student debtors.

If you want to check out the full study, spend some time on the Student Loan Hero website. You might even find some tools and advice to help you better manage and pay off your student loan debt.

I've always found the best way to deal with student debt is to avoid student loans. If you must borrow, the next best strategy is seeking education that will lead to a good job. I recommend something in health care, business, a skilled trade or any number of STEM fields.

I'd steer clear of the liberal arts. It worked out fine for me (so far), but your mileage may vary.

BLOOD MONEY: Need some extra cash to pay off that loan? Have you thought of plasma donation? It appears to be a growth industry in Augusta.

One of the nation's largest plasma-collection companies, Octapharma Plasma, is planning to open a site in the Augusta West Plaza shopping center at the corner of Wrightsboro Road and Bobby Jones Expressway.

The Swiss-based company has filed construction plans to rebuild the space next to CitiTrends into its first Augusta-area plasma center. It has more than 80 nationwide.

The Octapharma center isn't the town's only plasma-procurement premise. There's also the BioLife Plasma Services donation center that opened last year on Bobby Jones Expressway in Martinez. Over on Peach Orchard Road is Biotest Plasma, and on Wrightsboro Road is a center operated by KEDPLASMA.

Why are all these folks so interested in our fluids?

The increase in immunodeficiency disorders and new product launches is helping drive the growth. Plasma, which is about 55% of your blood, is used to treat immunodeficiency disorders, hemophilia, burns and kidney disorders.

A report by Azoth Analytics said the global blood plasma market "is projected to display a robust growth" rate of 10.18% between 2018 to 2023. BCC Research forecasts the market will reach $35.5 billion by 2023. Plasma centers are popping up everywhere. In 2005, there were fewer than 300 in the U.S., now there are nearly 800.

The centers pay donors anywhere from $20 to $50 a pop depending on the volume collected. U.S. law lets people donate up to twice a week, providing an interesting supplemental revenue source for those willing to have their blood removed, run through a centrifuge and then have their red cells pumped back into their body with saline and an anti-coagulant.

Peculiar how donating whole blood is considered an altruistic act (you get only cookies and a t-shirt) but but donating plasma is a cash-and-carry proposition, isn't it?

According to research firm AudienceSCAN, nearly 2% of American adults plan to sell plasma in the next 12 months, 52% of which are women. About 38% of sellers are between the ages of 18 and 24. Most of them (60%) are single or divorced and more than a third (38%) earn less than $25,000 a year.

Augusta's per capita income, $25,163 in 2017, might explain why plasma centers are springing up around town.

NO-GO GROCERIES?: I'm wondering why eurogrocer Lidl still hasn't moved on the 5 1/2 -acre tract it owns off Furys Ferry Road near the intersection with The Pass. It bought the land two years ago as part of its expansion in to the metro Augusta market.

When I asked the company about the status of the future store, I received a fairly non-committal response: "This site is currently under evaluation, but it is too early to offer a more detailed outlook for this property. As we continue to expand across Georgia, we are laser-focused on opening in locations that will be the most convenient for the most customers."

The company then provided a list of 25 locations, none of which are in the Augusta-Aiken area.

Lidl operates two metro area stores: 417 E. Martintown Road in North Augusta, and 1096 Alexander Dr. in Augusta.

DEAL OF THE WEEK: Augusta real estate firm The Palomar Group this past week announced it completed the sale of the nearly 10,000-square-foot Dyess Park retail strip for $2.42 million.

The multi-tenant retail property, off Jimmie Dyess Parkway at 4103 Madeline Drive, is 100 percent occupied, with tenants including Jersey Mike's, Mad Vapes and Twisted Burrito. The firm said the seller was the original developer and that the buyer, whom it represented in the transaction, was a "local investment fund."

FULLY COMMITTED: Chances that Plant Vogtle's units 3 and 4 will end up abandoned like V.C. Summer's units 2 and 3 in South Carolina are becoming increasingly nil.

The Municipal Electric Authority of Georgia, better known as MEAG Power, recently raised $619 million through a limited public debt offering to fund its share of the project on behalf of SPVJ, the MEAG subsidiary that will sell power to Jacksonville, Fla.'s city-owned utility, the Jacksonville Electric Authority.

MEAG, which owns 22.7% of the Vogtle Project, has a 20-year agreement to sell power to JEA.

"We concluded that a limited public offering would be an optimal means to access the capital markets both because of the availability of low-cost financing and because it would involve only sophisticated investors capable of accurately assessing the viability of the offering," MEAG CEO Jim Fuller said.

Roger that.

LINED-UP TO STRIKE: Call me old-fashioned, but I still have a landline phone at my house. I rarely use it, but I like the fact it's there. Most people got rid of theirs a long time ago.

Which is probably one of the reasons AT&T wants to cut 1,800 jobs tied to its Southeast landline phone operations, including 151 jobs in Georgia. That doesn't sit well with the Communications Workers of America, which has voted to go on strike if negotiations for its contract, which expires , fall through.

To be clear, the union isn't striking over the pending layoffs, but the cuts certainly do not make them happy.

"AT&T is highly profitable and has received huge tax windfalls in the past few years. The company should be investing in its network and in its workforce so that we have modern, reliable telecommunications service everywhere, not just in the big cities and wealthiest areas," the union's District 3 Vice President Richard Honeycutt said.

Publicly, AT&T has said it is confident an agreement will be reached, and that strike votes are a routine part of the negotiating process.

SPEAKING OF STRIKES: National Bowling Day is . There will be specials at bowling alleys across the metro area, including its newest one, Bowlero (formerly the Brunswick Zone National Lanes), at 3067 Washington Road. The hipster-inspired bowling alley is offering two free games for anyone signing up for its MVB Rewards Program.

My personal-best score is 148, by the way. And that's without the bumpers.

Reach Damon Cline at (706) 823-3352 or dcline@augustachronicle.com.

___

(c)2019 The Augusta Chronicle (Augusta, Ga.)

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