How Can You Combat Student Loan Rate Hikes?
With the recent rise in student loan rates pharmacy students may want to revisit cost-of-living numbers.
Federal Stafford Loan interest rates for undergraduates look to move from 3.76% to 4.45%. Graduate student Stafford Loans will increase from 5.31% to 6% and PLUS loans will rise from 6.31% to 7% as the Federal Reserve increases interest rates. The prior Administration tied student loan rates closer to the prevailing rates, resulting in the increase.
If you already borrowed, it’s not an issue because the rate stays where you started. However, as you borrow new loans, you’ll see the higher rate. These small increases may precede more in the future. The economy is succeeding and the Federal Reserve is acting. As loans get more expensive, it’s important to know salary and cost-of-living numbers when deciding on a home state.
Cost of Living
A recent list of the highest pharmacist salaries by state appeared and ranked the states as best and worst based on that salary. Neglecting the cost-of-living in that state and the local city-by-city differences makes that data misleading. While it is difficult to compare state pharmacist data versus salaries in certain regions, it’s easy to use a cost-of-living calculator. Input how much someone earns in a home city and a destination city. The calculator provides a new figure one needs to preserve their prior cost of living. To give perspective on how well Iowans, touted as the second worst place to live based on average state pharmacist salary in 2016 in the recent article, compare with the cities, I created this chart.
In the first column is a major city in the United States. The second column shows the data from the 2016 state pharmacist salary data. The third column compares Iowa’s $110,240 state salary to how much they need to earn in the destination city to keep their standard of living. Iowans have a low state average salary at $110,240, but the cost-of-living is equally low. In other major cities, pharmacists have to earn astronomical salaries to compare. For example, in Manhattan, New York, a pharmacist must earn more than $300,000 to equal the Des Moines, Iowa pharmacist. Those pharmacists in Anchorage, Alaska, Los Angeles, California, and Honolulu, Hawaii would need to earn over $200,000 each year.
It makes little sense to move to a state based solely on salary. However, by recognizing what data you need can help your money go further as student loan interest rates rise.
Cost of living
Des Moines, Iowa
Des Moines, Iowa
Las Vegas, Nevada
Santa Fe, New Mexico
Providence, Rhode Island
Newark, New Jersey
New Haven, Connecticut
Manchester, New Hampshire
Los Angeles, California
Manhattan, New York