The cost of paying off a student loan has risen more than a third since the 2008 financial crisis, according to a new report from the Federal Reserve Bank of St. Louis.
The report found that average interest rates on the average installment loan have risen to 7.75 percent in the last five years, up from 4.6 percent before the financial crisis.
“These figures have grown as the economy has improved, but their growth has been uneven and have risen at different rates depending on the state of the economy,” said Scott Linskey, chief economist at the Federal Deposit Insurance Corporation.
“States have been especially hard hit, particularly in the southern states.”
In the states of Florida, Ohio and Illinois, average annual interest rates rose the most.
Florida has seen the largest growth in average interest rate since the recession, from 2.3 percent in 2008 to 4.1 percent in 2016.
Ohio has the highest rate growth, increasing by 3.6 percentage points.
The average annual rate in Illinois was 5.6.
The national average is 4.5 percent.
Linskeys report was released Tuesday, just days before President Donald Trump is set to visit Florida to announce a $200 billion stimulus package.
Lately, interest rates have been trending lower in many parts of the country, but in Florida, the rate has risen the most, Linshers research found.
“Florida is one of the few states where the rate of interest on outstanding installment loans has continued to fall in recent years,” Linskers research said.
“This has led to some of the biggest drops in rates since the financial downturn.
Florida’s rates are lower than other states and the national average.
Losing money on the same loan has also been a problem for borrowers in Florida and the country.
In addition to the state that has the largest amount of people underwater on the student loan, the Fed’s report also noted that states that have higher average interest payments have also seen higher defaults on these loans. “
The rising interest rate may have a ripple effect through the broader economy, which may result in some people going into debt to get a loan and others not getting a loan in the first place,” Lipsman said.
In addition to the state that has the largest amount of people underwater on the student loan, the Fed’s report also noted that states that have higher average interest payments have also seen higher defaults on these loans.
The states with the highest average debt per borrower are Georgia ($2,898), Florida ($2.,664) and Mississippi ($2.4,566).
In Georgia, defaults on installment loan loans jumped from 2,878 in 2015 to 4,974 in 2016, Lipsmans report said.
Florida was also one of eight states that saw a significant increase in defaults during the recession and have seen that rate increase even more, with total defaults up nearly 7,000 percent since 2007.
Overall, borrowers with installment loans account for more than 16 percent of the U.S. population, according the Fed.