Study Finds Student Loan Borrowers Can Put an Extra $1,977 Towards Debt Every Year by Relocating

save on income taxes

A new study by Student Loan Hero investigates how much student loan borrowers can save by moving to a state with no income tax.

New York, NY, April 11, 2017 —  Student Loan Hero CEO Andrew Josuweit graduated from college with close to six figures in student loan debt. By the time he was able to begin paying them off, the balance had ballooned to $107,000. However, by moving from New York to Texas, he was able to save more than $15,000 a year in income taxes – which he used to aggressively pay off that debt.

Josuweit’s case may be an extreme one, but a new study by Student Loan Hero finds that the typical student loan borrower can save an average of $1,977 by relocating to a state with no income tax. By using these savings to make extra student loan payments, borrowers can cut several years and thousands of dollars off their repayment.

Student Loan Hero also surveyed student loan borrowers to find out how many are actually willing to move across state lines in order to save money for paying off student loans.


Despite the potential savings, 70 percent stated they would not be willing to move in order to realize these savings. Just 18 percent of survey respondents would move to a state with no income tax save money, while 12 percent stated they would move if it could save them $3,000 or more in state income tax.

“When you have a significant amount of debt to pay off, you have to make significant changes to your finances and lifestyle,” said Josuweit. “Student loan borrowers can skip their daily lattes and brown bag their lunches, but that’s probably not going to get them the fast results they are hoping for. In many cases, they have to consider drastic moves, such as relocating like I did.”

State Tax Savings Calculator

To help student loan borrowers determine whether relocating would be worth the savings, Student Loan Hero developed a one-of-a-kind State Tax Savings Calculator. By inputting basic tax and student loan information, users can estimate their effective tax rate, potential tax savings, and how those savings could help to pay down student loans faster by moving to another state.


Study Methodology

The survey was conducted as a Google Consumer Survey, run from March 11-14, 2017. It collected answers from 1,018 respondents who have student loans. The largest margin of error present in any survey response was 3.1 percent.

The typical state income tax burden in each state was calculated using May 2016 BLS wage data and state tax data from the Federation of Tax Administrators and Tax calculations assumed a single filer claiming one exemption and a standard deduction, according to the state’s tax laws.

Projected student loan savings assumed a borrower entering repayment on a 10-year standard repayment schedule. Calculations for undergraduate debt assumed a balance of $35,000 at the current Direct federal loan rate of 3.76%. For graduate debt, this study assumed a balance of $57,600 at the current Grad PLUS loan rate of 6.31%.

About Student Loan Hero

Student Loan Hero combines easy-to-use tools with financial education to help the millions of Americans living with student loan debt manage and pay off their loans. Student Loan Hero has helped more than 100,000 borrowers manage and eliminate over $2 billion in student loan debt since 2012 and assists over 3.5 million people in becoming more financially healthy every year.

Student Loan Hero offers both current and former students free loan calculators, as well as unbiased, personalized advice and repayment plans through an easy-to-use online dashboard.

Founded in 2012 by CEO Andrew Josuweit, who himself had over $100,000 in student loans, Student Loan Hero operates on the belief that all loan help and recommendations should come with honesty and no hidden agenda.

For more information, visit

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