The Burden Of Debt

The State Of Student Debt

After mortgages, it makes up the largest component of all household debt in America

The personal-finance website WalletHub today released its report on 2019’s States with the Most and Least Student Debt. Reprinted with permission. Visit here.

July 10, 2019 — As the 2020 presidential election draws nearer, one of the hot-button issues for candidates is student debt. Some democratic contenders, such as Bernie Sanders and Elizabeth Warren, support the cancellation of debts. Other candidates have offered plans including refinancing options, higher grants and free community college education.

It’s not surprising that student debt has become such a high-profile talking point. After all, 10.9 percent of all student-loan debts 90+ days delinquent or in default as of Q1 2019. Save for mortgages, student loans make up the largest component of household debt for Americans. And our collective debt keeps growing. At the end of the first quarter of 2018, total outstanding college-loan balances disclosed on credit reports stood at $1.49 trillion, according to the Federal Reserve Bank of New York.

All States Are Not Equal

But not all states are equal when it comes to the burden of student loans. With student-loan debtors in mind, WalletHub compared the 50 states and the District of Columbia based on 12 key measures of indebtedness and earning opportunities. Our data set ranges from average student debt to unemployment rate among the population aged 25 to 34 to share of students with past-due loan balances. Read on for our findings, insight from a panel of researchers and a full description of our methodology.

To determine the states that are friendliest toward student-loan debtors, WalletHub compared the 50 states and the District of Columbia across 12 key metrics. The data set ranges from average student debt to unemployment rate among the population aged 25 to 34 to share of students with past-due loan balances.

States with the Most Student DebtStates with the Least Student Debt
1South Dakota42Arizona
2Pennsylvania43Alaska
3West Virginia44Nevada
4New Hampshire45Florida
5Iowa46District of Columbia
6Minnesota47Washington
7Mississippi48Wyoming
8Ohio49California
9Michigan50Hawaii
10Rhode Island51Utah

 

Best vs. Worst

  • Utah has the lowest average student debt, $18,838, which is two times lower than in Connecticut, the state with the highest at $38,510.
  • Utah has the lowest proportion of students with debt, 38.00 percent, which is 1.9 times lower than in New Hampshire, South Dakota and West Virginia, the states with the highest at 74.00 percent.
  • Massachusetts has the lowest share of student loans in past-due or default status, 7.58 percent, which is 2.4 times lower than in Mississippi, the state with the highest at 18.34 percent.
  • Hawaii has the lowest share of student-loan borrowers aged 50 or older, 3.80 percent, which is 2.6 times lower than in Vermont, the state with the highest at 9.93 percent.

Tip: If you’re considering borrowing money for college or are in danger of defaulting, we advise using a Student Loan Calculator to determine an affordable monthly payment and payoff timeline.

Ask the Experts

Having more student debt than one can handle can produce significant troubles in the future. To advance the discussion, WalletHub asked a panel of experts to share their advice and insight with current and potential student-loan borrowers. Click on the experts’ profiles to read their bios and responses to the following key questions:

  • What tips can you offer students looking to minimize the amount of debt they take out for higher education?
  • Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?
  • How do we slow the growth of higher-education expenses?
  • Do you agree with certain 2020 presidential candidates’ ideas on cancelling student debt? Why or why not?
  • How does the growth of student-loan debt affect the economy?
  • How should students and their parents think about the return on investment to spending on higher education?

To see how these experts responded, and to view the full report and your state or the District’s rank, please visit here.