Some States Have Much Greater Debt Problems With Student Loans: Study


When it comes to student debt, you seem to be doing a lot worse in Georgia than you are in Wyoming – these two states have had the toughest and easiest times with student loans, according to the LendingTree research team.

As the study results suggest, where you live will help you determine where to go with your student debt.

To find out where credit is the greatest burden, we rated all 50 states (excluding the District of Columbia) using three keys Student debt ratios: Percentage of residents with educational debts, median balance per borrower and default rate (delay in monthly payments). Here’s what we found out:

Main results

  • Georgia was the first of three southern states in the top five student debt problems. Peach State ranked in the worst 15 for each of the metrics it analyzed, including the second highest median debt per borrower ($ 24,751), with only Maryland having a higher average balance. (Continue reading)
  • The seven states with the lowest student debt problem were all in the western United States, led by Wyoming. Only 19% of the population there have an educational debt, and their average bankroll is a modest $ 17,017. Wyoming ranked in the top five (that is, lowest) in both categories. (Continue reading)
  • The story was not that simple for some states. Minnesota, for example, reported the highest percentage of student loan residents, with around 3 in 10 residents at risk of repayment – on the other hand, a relatively small percentage (9.2%) of Minnesota’s debt defaults on student loans. (Continue reading)

Where student debts weigh heaviest

Our study showed that Georgia is facing the greatest difficulties on the student debt front. More than one in four residents of the state (27%) have borrowed student loans for higher education, and they owe an average of nearly $ 25,000 apiece.

To make matters worse, about 14% of these Georgian borrowers were 90 days or more behind with their payments, exposing them to the risk of Student loan failure. That’s significantly more than the 11% or so of borrowers across the country who are 90 days or more behind on their education debts.

Ranking just below Georgia were …

2. Ohio: Buckeye State ranked fourth for the percentage of residents who owe student debt (at 30%) and sixth for average student loan balance outstanding (at $ 22,828). On the flip side, Ohio’s relatively low delinquency rate of 12.1% may have deterred the state from topping Georgia on the overall list.

3. South Carolina: The state had the fourth highest average debt balance for student loans (23,813) and the seventh highest default rate (at 14%). Good news: 25% of South Carolinians have student debts, which is in the middle (25th) for this figure.

Unsurprisingly, these three states also had high student loan debt levels at the city level: Atlanta; Akron, Ohio; and Charleston, SC, consisted of 3 of the 4 Places with the most student debt in 2020.

Countries with lower student debt

At the other end of the scale, some states have a more favorable student loan situation, with Wyoming being the best.

Less than one in five residents (19%) here has student debt fought off, and they owe an average of just $ 17,017. These numbers compare to the 69% of 2019 national-level graduates who borrowed an average of $ 29,900 for their degrees.

Wyoming residents also seem better equipped to stay on top of their loan repayments – more than 9 out of 10 borrowers in the state said their repayment was on track and they avoided late payments.

The three states with the lowest debt burden for students are rounded off by Washington and Utah, which rank 40 or below in all three key figures analyzed.

Washington state alumni appear to be less reliant on loans to cover their attendance costs. The median balance of its residents of $ 19,075 could be attributed to the fact that four of its cities – Cheney, Olympia, Ellensburg and Bellingham – are among the The 20 best cities for undergraduate students.

Location impact on student loan repayment

Of course, not all countries share such a black and white story. Minnesota, for example, was ranked 10th overall, with 30% of its population having an educational debt. And yet, the delinquency rate (9%) ranks 39th, meaning Minnesotans do a better job than most at avoiding late payments.

Similarly, Louisiana (15th overall) had an exceptionally high proportion of student loan arrears (15%), but the state was driven by its relatively low median student loan balance per borrower ($ 20,270).

Future and current borrowers are likely to face repayment made difficult by at least some of these factors. Finally, location helps determine the cost of studying – and the cost of living – as well as the availability of postgraduate employment.

For future college students looking to avoid unnecessary debt, consider Student Loan Hero’s tips:

  • Cancel priority public schools with most student loans: It’s common knowledge that private universities tend to cost more, but you could also try avoiding expensive public institutions, especially if you’re an overseas student staring at an even higher price.
  • Remember that cheapest small colleges: In fact, smaller is usually cheaper. Another popular and effective way to lower the cost of your degree is to spend the first two years of your schooling at a local community college.
  • Before you take out loans, exhaust all options: Tapping into savings, taking on a vacation job, and aggressively seeking scholarships and grants are all preferable to taking on debt. Unlike loans, scholarships and grants rarely have to be paid back.
  • When you need credit, do it strategically: Federal student loans are generally over recommended private student loans because they offer more extensive repayment options, such as access to income-oriented repayment plans and loan forgiveness programs. Still a personal loan or a Income Share Agreement could top up those funds when you hit your federal credit limit.

For borrowers who are already saturated with student debts, our advice also includes considering moving. If you move to another, more student debt-friendly state, you may receive one of the following benefits on your repayment:

That being said, great repayment doesn’t just depend on where you live or work. You could live in any State and still be able to sign up for an income-oriented repayment plan to lower the monthly payments on your federal loans. Or you could look it up Refinancing your federal and / or personal loans to lower your average interest rate.

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