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    Student loan debt by state: what explains the disparities?

    Jeremy Coppock
    Jeremy Coppock

    Jeremy is an education researcher, journalist, and editor for Degreechoices. He majored in Slavic languages and has a master’s degree in Eastern European studies.

    He has previous experience as a fraud analyst, in-house translator, teacher, and truck driver.

    Student loan debt by state: what explains the disparities?
    Contents

      Young Americans are drowning in debt, and student loans are a major culprit. But this problem isn’t spread evenly throughout the country: residents of Maryland, the state with the highest average student debt burden per borrower, owe 43.72% more than residents of North Dakota, the state with the lowest.

      Based on data from the Office of Federal Student Aid, we have mapped out the states with the highest and lowest average student debt loads per borrower.

      To put this data in context, we also indicate each state’s average bachelor’s-level earnings, the average net cost of college, and educational attainment.

      While many more factors contribute to high indebtedness, one thing is clear – in some states, a college education is not paying off quickly enough.

      High-level findings

      Debt

      • Maryland has the highest student debt per borrower, at an average of $43,116.
      • Georgia is second, with an average debt of $41,775 per borrower, while Virginia is third, with an average debt of $39,599 per borrower.
      • North Dakota has the lowest average debt per borrower, at an average of $30,000.
      • The states where the highest percentage of bachelor’s holders have student debt are Mississippi, Louisiana, and West Virginia.
      • Conversely, Hawaii, Utah, and Washington have the lowest percentage of bachelor’s holders with student debt.
      • The states with the largest total student debt burdens are, unsurprisingly, the most populated states: California, Texas, Florida, and New York. California has the most student loan debt in total, at $149 billion.

      Cost of college and future earnings

      • The states where education is the most expensive on average are New Hampshire, Rhode Island, and Massachusetts.
      • Meanwhile, residents of Wyoming, Alaska, and New Mexico pay the least on average for their education.
      • Real earnings for bachelor’s holders are highest in Massachusetts, Connecticut, Utah, and North Dakota.
      • Bachelor’s-level real earnings are lowest in New Mexico, Arizona, Hawaii, and Alaska.

      » Read: States whose colleges have the highest-paid grads

      Educational attainment

      • Maryland, the state with the highest average student debt, is also the 4th most educated state by percentage of the population with a bachelor’s education or higher, behind Massachusetts, Colorado, Vermont, and New Jersey.
      • The least educated states are West Virginia, Mississippi, Arkansas, Louisiana, and Kentucky.

      1. Maryland

      Topping the list for the states with the highest amount of student debt per borrower is Maryland, with an average debt of $43,116. In total, Maryland’s student debt stands at $36.7 billion across 851,200 borrowers.

      2. Georgia

      The state with the second highest student debt per borrower is Georgia, with an average debt of $41,775. Georgia’s total student debt of $70.6 billion is spread across 1.69 million borrowers.

      3. Virginia

      Virginia has the third highest amount of student debt per borrower. The state’s total student debt is $43.8 billion spread across 1.1 million borrowers, equating to an average student debt of $39,599.

      4. Florida

      With an average debt of $38,683, Florida has the fourth-highest student debt per borrower. Florida has 2.72 million total borrowers, while the state’s total student debt is $105.4 billion.

      5. South Carolina

      The state with the fifth highest student debt per borrower is South Carolina, with an average student debt of $38,360. The state’s total student debt is $29.1 billion across 758,600 borrowers.

      6. Illinois

      Illinois is sixth on the list of states with the highest student debt per borrower, with an average student debt of $38,349. A total of 1.65 million borrowers hold $63.1 billion of student debt in Illinois.

      7. Delaware

      The state with the seventh highest amount of student debt per borrower is Delaware, with an average debt of $38,174. The First State has $5.1 billion of student debt across 133,600 borrowers.

      8. North Carolina

      With an average student debt per borrower of $38,143, North Carolina has the eighth highest student debt per borrower on average. In total, 1.35 million borrowers hold $51.6 billion of student debt in North Carolina.

      9. Vermont

      Vermont has the ninth highest student debt per borrower. Vermonters hold $3 billion of student debt across 78,800 borrowers, giving an average student debt per borrower of $38,071.

      10. Hawaii

      Hawaii rounds out the top 10 states, with an average student debt of $37,995. The Aloha State’s 123,700 borrowers hold $4.7 billion in student debt.

      Average student debt by state

      Below is a list of states by student debt per borrower, from highest to lowest. We have included the state’s total student debt burden, in billions of dollars, and the number of borrowers in that state. Data comes from the Office of Federal Student Aid.

      STATE Total student debt (billions) Number of borrowers Average student debt burden
      Maryland $36.7 851,200 $43,116
      Georgia $70.6 1,690,000 $41,775
      Virginia $43.8 1,106,100 $39,599
      Florida $105.4 2,724,700 $38,683
      South Carolina $29.1 758,600 $38,360
      Illinois $63.1 1,645,400 $38,349
      Delaware $5.1 133,600 $38,174
      North Carolina $51.6 1,352,800 $38,143
      Vermont $3 78,800 $38,071
      Hawaii $4.7 123,700 $37,995
      New York $94.9 2,498,100 $37,989
      Oregon $20.5 547,900 $37,416
      California $149 3,985,700 $37,384
      Alabama $24.2 649,400 $37,265
      Colorado $29.4 795,900 $36,939
      Mississippi $16.5 447,100 $36,904
      Tennessee $32.5 889,00 $36,558
      Michigan $51.7 1,420,100 $36,406
      New Jersey $44.9 1,236,500 $36,312
      Washington $29.1 804,400 $36,176
      Connecticut $18.5 513,100 $36,055
      Pennsylvania $66.5 1,859,00 $35,772
      Missouri $30 844,200 $35,537
      Arizona $32.5 917,300 $35,430
      Alaska $2.4 68,700 $34,934
      Massachusetts $32.3 924,900 $34,923
      Ohio $63 1,810,200 $34,803
      Louisiana $23.2 667,100 $34,777
      New Hampshire $6.7 195,100 $34,341
      New Mexico $7.9 232,200 $34,022
      Nevada $12.3 361,800 $33,997
      Minnesota $27.2 801,100 $33,953
      Maine $6.5 192,00 $33,854
      Montana $4.4 130,600 $33,691
      Arkansas $13.4 399,900 $33,508
      Texas $127.2 3,813,600 $33,354
      Idaho $7.4 223,300 $33,139
      Kansas $12.9 389,400 $33,128
      Utah $10.6 320,000 $33,125
      Kentucky $20.3 613,100 $33,110
      Indiana $30.3 918,300 $32,996
      Rhode Island $4.9 149,000 $32,886
      Nebraska $8.2 252,700 $32,450
      Wisconsin $23.8 738,400 $32,232
      West Virginia $7.4 230,100 $32,160
      Oklahoma $16.1 505,100 $31,875
      South Dakota $3.8 119,700 $31,746
      Iowa $13.5 438,900 $30,759
      Wyoming $1.7 56,000 $30,357

      Source: Office of Federal Student Aid

      Average cost of college by state

      It’s tempting to assume that a major cause of high student loan burdens would be expensive tuition or low salaries.

      To check if this is true, we looked at data on future earnings and college costs from IPEDS and College Scorecard.

      The earnings column represents average salaries 10 years after graduation, adjusted to reflect cost of living. Meanwhile, the cost data does not refer to tuition, but rather to the net cost of college – which is the average amount students pay after financial aid. Only students who received some financial aid were included (85% of students did).

      Interestingly, the correlation between both cost and earnings and average indebtedness is somewhat weak.

      This can partially be explained by the fact that cost and earnings data is from 2022, whereas indebtedness represents a snapshot in time of a long-term process. Individuals with student debt graduated from university in different years and emerged on the job market into very different economies, when college costs were also different. People move to new states after graduating, and college used to be a lot cheaper.

      » Also read: The most expensive colleges in America

      STATE Average cost of college Average real earnings (bachelor’s level)
      New Hampshire $28,269 $58,169
      Rhode Island $27,968 $53,166
      Massachusetts $27,605 $62,222
      Connecticut $27,207 $61,164
      Pennsylvania $26,407 $56,477
      New York $23,931 $51,445
      Vermont $22,785 $53,819
      New Jersey $21,992 $50,161
      Virginia $21,870 $52,833
      Oregon $21,590 $53,570
      Ohio $21,253 $55,131
      Maryland $20,521 $53,589
      Illinois $20,129 $52,793
      Alabama $20,067 $50,740
      Minnesota $19,971 $55,462
      Maine $19,771 $47,266
      Iowa $19,738 $59,237
      Colorado $19,368 $46,314
      South Dakota $19,344 $54,018
      South Carolina $19,251  $50,444
      Kansas $18,878 $54,731
      Nebraska $18,705 $57,948
      North Carolina $18,546 $51,302
      Washington $18,352 $55,495
      Georgia $18,251 $49,492
      Delaware $18,076 $58,303
      Montana $17,879 $47,707
      Wisconsin $17,770 $57,286
      Michigan $17,452 $57,307
      Tennessee $17,365 $49,978
      Missouri $17,163 $54,716
      Texas $17,115 $53,893
      Hawaii $17,107 $43,239
      California $17,021 $52,035
      North Dakota $16,592 $59,567
      Indiana $16,591 $57,326
      Oklahoma $16,505 $52,050
      Louisiana $16,160 $50,355
      Florida $15,608 $50,843
      Arkansas $15,508 $49,588
      Kentucky $15,371 $49,967
      Mississippi $14,748 $47,675
      Arizona $14,023 $42,755
      Idaho $13,949 $49,139
      Utah $13,362 $59,725
      West Virginia $13,270 $51,199
      Nevada $13,182 $55,301
      New Mexico $12,728 $42,342
      Alaska $11,546 $44,168
      Wyoming $11,085 $54,674

      Source: IPEDS
      *Correction: due to a data extraction issue, average cost of college figures were wrong between 21 November and 5 December 2023. The error has been fixed.

      States by education level

      Another potential assumption is that states with high average educational attainment may have higher student debt per borrower.

      While student debt data does not factor in individuals with no student debt, some link could be expected: states with a high level of educational attainment may have a strong, highly skilled job market with more opportunities for well-paying jobs. This could lead students to be willing to take on higher levels of debt with the expectation that they will be able to earn more after graduation, making it easier to repay their loans.

      » Also read: Should you go to a public university?

      However, the correlation between high student debt and statewide educational attainment is also somewhat weak. While Maryland, the state with the most student loans per borrower, is also the 4th most educated state, other highly educated states like Massachusetts have relatively low student debt burdens.

      Below, we reveal the average educational attainment by state. The list is from the US Census Bureau’s 2021 data for people aged 25 and older.

      The most educated state is Massachusetts, while the 2nd and 3rd most educated states are Vermont and Colorado.

      We also show the percentage of people with a bachelor’s degree or above who currently have student debt. This data isn’t completely representative of a state’s higher ed landscape, as people may have moved from other states.

      Nevertheless, it reveals interesting insights: college-educated residents of Southern and Midwestern states seem to have the highest student debt rates, whereas Northeastern and Western states have the lowest.

      STATE Percent with a bachelor’s degree or higher Percent of bachelor’s degree holders with debt
      Massachusetts 46.6% 28.4%
      Colorado 44.4% 30.8%
      Vermont 44.4% 27.4%
      New Jersey 43.1% 31.0%
      Maryland 42.5% 32.4%
      Connecticut 42.1% 33.6%
      Virginia 41.8% 30.6%
      New Hampshire 40.2% 35.0%
      New York 39.9% 31.5%
      Washington 39.0% 26.6%
      Minnesota 38.9% 36.1%
      Illinois 37.1% 35.0%
      Utah 36.8% 26.0%
      Rhode Island 36.5% 37.2%
      Oregon 36.3% 35.5%
      California 36.2% 28.1%
      Maine 36.0% 38.7%
      Delaware 35.6% 37.3%
      Kansas 35.4% 37.4%
      Hawaii 35.3% 24.2%
      North Carolina 34.9% 36.7%
      Montana 34.8% 33.9%
      Georgia 34.6% 45.3%
      Pennsylvania 34.5% 41.4%
      Nebraska 34.4% 37.4%
      Florida 33.2% 37.6%
      Texas 33.1% 39.0%
      Alaska 32.8% 28.5%
      Wisconsin 32.5% 38.6%
      Arizona 32.4% 39.0%
      Michigan 31.7% 44.6%
      Missouri 31.7% 43.2%
      South Dakota 31.7% 42.1%
      North Dakota 31.7% 36.5%
      South Carolina 31.5% 46.4%
      Ohio 30.7% 50.1%
      Idaho 30.7% 38.2%
      Iowa 30.5% 45.0%
      Tennessee 30.5% 41.8%
      New Mexico 30.1% 36.4%
      Wyoming 29.2% 33.1%
      Indiana 28.9% 46.6%
      Oklahoma 27.9% 45.4%
      Nevada 27.6% 41.7%
      Alabama 27.4% 46.9%
      Kentucky 27.0% 50.4%
      Louisiana 26.4% 54.6%
      Arkansas 25.3% 52.2%
      Mississippi 24.8% 61.1%
      West Virginia 24.1% 53.5%

      Source: US Census Bureau

      Final thoughts

      America’s student debt crisis has complex roots that require comprehensive solutions. Fixes need to provide relief for lenders with unmanageable student debt while also addressing the root causes of indebtedness.

      But what can you, as a student, do now? If you want a college education but you’re uneasy about student loans, we encourage you to think of college as an investment. Some degrees pay off better than others.

      To help you make a smart decision, we rank degrees by their value for money. For example, check out our rankings of the best national universities, the best colleges in Maryland, or the best nursing programs. By looking at your college education like an investor would, you can avoid excessive debt and set yourself up for economic freedom after graduation.

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