In the past 13 years, the average student loan has rocketed by $20,000. According to Business Insider, today’s American students graduate with more than $37,000 worth of debt. Understandably, with this amount of debt on a student’s shoulder, day to day living expenses can be difficult to manage. However, if you dream of paying off your student debt, owning your own home and being financially comfortable, then moving to one of these states will significantly benefit you.
Move to Maine
In 2008, Maine allowed its graduates to use their loan payments as tax credits in order to bolster the state’s workforce. However, they have now opened up the opportunity to out-of-state graduates. The Educational Opportunity Tax Credit simply means that any cash you put towards your student debt is subtracted from your annual state income taxes. Therefore, this makes the country’s most northeastern state highly attractive to all U.S graduates as the potential to save thousands is high.
Avoid income tax in these seven states
Bustle reports that 18% of graduates move to a state with no income tax to save money. There are currently seven states in the country which don’t tax their residents’ income. These are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Meanwhile, Tennessee will join them by 2021. So, when you’re reviewing your cash flow and seeking out the best ways to pay your student debt back, consider moving to one of these states. You may need to borrow some cash in order to fund your move. However, what you’ll save in income tax in the long-run will cover these costs.
Lower your living costs
The cost of living in America varies considerably from states to state. Some of the most expensive states to live in are Hawaii, California and New York. Therefore, it’s wise to get yourself out of these areas and opt for one of America’s cheapest states to live in which include Mississippi, Michigan, and Kansas. As food, rent, energy costs, and medical bills are all generally lower in these states, you’ll be able to put more of your hard-earned cash towards your student debt and future plans.
Debt is currently impacting the lives of thousands of students across America. But, by simply moving to a new state which offers tax relief, no income tax or low-cost living you can significantly reduce your expenses and benefit your finances.