Student Loans in Michigan: Debt Stats, Repayment Programs and Refinancing Loans

Michigan borrowers carry an average federal and private student loan debt balance of $33,487, which is 9% less than the U.S. average of $36,689. However, Great Lakes State borrowers still face a considerable average monthly loan payment of $250.

In September, the state announced the Futures for Frontliners program, which offers tuition-free community college for frontline workers who served between April and June amid stay-home orders due to the coronavirus crisis.

Michigan also provides a handful of scholarship and grant programs, as well as a state-sponsored student loan repayment program, to help make the cost of education manageable. Here’s what else you should know about student loans in Michigan.

Student loans in Michigan: Borrowers owe average of $33,487 in federal, private debt — and more facts

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To help keep postsecondary education costs low, Michigan students have the option of attending one of the nearly 30 campuses in the state’s community college system. The state is also home to prominent four-year public universities, including:

University of Michigan Michigan State University Western Michigan University

Students can also consider Michigan’s private colleges and universities, with more than 30 campuses from which to choose, including:

Concordia University Rochester College Kalamazoo College

As briefly noted, eligible Michigan residents without high school or college degrees who were frontline workers between April and June 2020 can apply for the Futures for Frontliners program. This is open to a range of essential workers, from health care and public works personnel to grocery store clerks and laundromat workers. Recipients will receive free tuition at a state community college to pursue an associate degree or certificate.

The University of Michigan also offers a tuition-free program through its Go Blue Guarantee. It’s available to in-state residents with a household income of up to $65,000 and assets valued below $50,000. Simply apply to the university and submit a Free Application for Federal Student Aid to be considered. Admitted students who qualify will be automatically awarded.

Students who are ineligible for these free-tuition programs or need additional funding for school might decide to borrow federal or private student loans as an alternative.

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Student loan debt in Michigan’s largest counties, from Genesee to Wayne

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Student loan debt by ZIP code in Michigan’s largest city: Detroit

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Loan repayment programs for Michigan residents

Loan repayment programs available to Michigan residents can help lower overall education costs after graduation. Here are a few state and federal programs available to Michigan borrowers.

Michigan State Loan Repayment Program (MSLRP)

The MSLRP is available to Michigan-based primary medical, dental and mental health professionals. It offers up to $200,000 in loan repayment over an up to eight-year period. Workers must commit to consecutive two-year service contracts at a nonprofit clinic within a health professional shortage area. Health workers at qualified sites are required to serve a minimum of 40 hours a week for at least 45 weeks a year.

Public Service Loan Forgiveness (PSLF)

PSLF is a federal program that’s available to eligible Michigan borrowers who are employed in the public sector. To be eligible, borrowers must:

Be employed full time at a qualifying employer, such as a government agency or nonprofit organization Have federal direct loans Enroll in an income-driven repayment (IDR) plan Make 120 qualifying payments

After at least 10 years of qualifying payments have been fulfilled, the remaining direct loan balance is forgiven.

Teacher Loan Forgiveness

Through the federal Teacher Loan Forgiveness program, Michigan educators can receive up to $17,500 in loan forgiveness toward direct and Stafford loans. To be eligible, teachers in the state must commit to five years of full-time, consecutive service in a low-income school or educational service agency, in addition to other requirements. The $17,500 maximum is available only to qualified math, science or special education teachers.

University of Michigan Law School loan repayment assistance program

Graduates of the University of Michigan Law School can apply for its loan repayment assistance program. It requires borrowers with federal direct loans to enroll in an income-based repayment (IBR) plan, which could be as low as $0 a month. Graduates, who would receive IBR stipends, must apply for the loan repayment assistance program annually.

Michigan federal student loan borrowers younger than 25 owe more than national average — and more comparisons

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How to refinance student loans in Michigan

Seven percent of borrowers in Michigan owe $100,000 or more in federal student loans. Residents struggling with six-figure debt can consider student loan refinancing to ease that burden.

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Student loan refinancing takes a borrower’s existing loans — which could include federal or private loans, or a mix of both — and combines them into one new loan. The refinancing lender repays the original loan(s), and offers borrowers a loan with new terms and — ideally — a lower fixed interest rate.

Banks, credit unions, online institutions and private lenders offer refinanced loans. For example, Michigan First Credit Union provides its members with student loan refinancing up to $30,000.

Think twice before refinancing your federal loans, though. When you refinance federal student loans into a private loan, you’ll lose access to helpful government perks (loan forgiveness) and protections (income-driven repayment). You’ll also generally lose forbearance options, though some private lenders do offer this.

Sources 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 mappingstudentdebtorg

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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