In this article, we will take a look at the 20 states with the highest student loan debt. If you want to skip our discussion on the debt statistics and Biden’s student debt relief initiatives, you can go directly to the 5 States with the Highest Student Loan Debt.
In April this year, President Joe Biden shared the latest initiatives to provide student debt relief to more than 30 million Americans during the Biden-Harris administration. So far, the Biden-Harris Administration has authorized $146 billion in student debt relief for 4 million Americans. This has mainly been achieved through many executive actions, such as fixing public service loan forgiveness and income-driven repayment plans. The government also launched the SAVE plan that halves undergraduate loan payments, reduces monthly payments to $0 for millions of borrowers, and accelerates the process of debt cancellation for those with low balances.
On average, federal student loans amount to $35,210 per borrower as of 2024. Meanwhile, the average total student loan debt, which includes both federal and private loans, stands at $40,505. While this might not be the highest student loan in the world, it is still substantial. The burden of America’s student debt crisis has fallen heavily on young adults. This has occurred due to the increasing cost of attending college over the last three decades. College affordability has declined significantly over this time frame. According to the College Board, public four-year tuition has more than doubled, rising from $4,160 to $10,740 (adjusted for inflation), placing a growing burden on students and fueling the need for financial aid.
Due to the sharp rise in college costs and the inability to discharge these loans through bankruptcy, borrowers under 40 hold a staggering 55% of the total debt, amounting to nearly $900 billion. Thus, if we look at student loan debt by age, this age group will have the highest proportion.
The Growing Global Student Loan Market
Due to the high cost of college education, it is no wonder that the size of the student loan market is enormous globally. The global student loan market is expected to nearly double in size by 2031, from $3.9 trillion in 2021 to a projected $8.8 trillion. This is translated into a compound annual growth rate (CAGR) of 8.7% during this period. Growth drivers include lower interest rates and relaxed credit checks along with subsidized options. However, long repayment terms and credit score risks negatively affect the growth of this market. Major players in the global student loan market are Citizens Financial Group (NYSE:CFG), SLM Corporation (NASDAQ:SLM), and Sofi Technologies (NASDAQ:SOFI).
Citizens Financial Group (NYSE:CFG) is a well-known financial institution offering a wide range of banking services for both individuals and businesses. It has been around since 1828 and is headquartered in Providence, Rhode Island. The company recently reported its Q1 2024 earnings. Its net income stood at $334 million ($0.65 per share). While net income missed analyst predictions, the company’s total revenue of $1.959 billion was as per forecasts. Moreover, Citizens Financial Group (NYSE:CFG) was named among the Best Student Loan Refinancing Lenders 2024 by Forbes.
SLM Corporation (NASDAQ:SLM), also known as Sallie Mae, is one of the leading US education financing companies. The company has been helping families finance college education for 40 years. SLM Corporation (NASDAQ:SLM) offers a variety of products and services, such as college savings plans, scholarship search and planning tools, insurance, education loans, and online banking.
Sofi Technologies (NASDAQ:SOFI), a digital bank targeting millennials and young professionals, has transformed from its student loan roots into a one-stop shop for online financial services. Attracting customers with lower fees and a user-friendly interface, Sofi Technologies (NASDAQ:SOFI) is experiencing significant growth. In Q4 2023, new accounts increased by 44% year over year (585,000 added), and new product sign-ups rose 41% (695,000 added). Management anticipates continued net profitability throughout 2024.
Our Methodology
Our list of 20 states with the highest student loan debt has been compiled using data from the Federal Reserve Bank of New York. The states have been ranked in ascending order of the total student loan balances as of the fourth quarter of 2022. With each state, we have also mentioned the number of borrowers to provide insights into the average debt burden per borrower.
You can also check out the 25 Best Countries For College Education here.
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20 States with the Highest Student Loan Debt
20. Missouri
Total Borrowers: 836,780
Student Loan Balance: $29.65 billion
The State of Missouri faces a significant student loan debt challenge. The average borrower in Missouri owes $35,397 in student loans. Over 836,000 Missouri residents, or 13.51% of the population, carry student loan debt, making it the 15th highest per capita rate in the US. More than half (50.3%) of these borrowers are under 35 years old.
19. Washington
Total Borrowers: 823,540
Student Loan Balance: $30.10 billion
Washington’s total student loan debt stands at $30.10 billion. This translates to an average debt of $33,423 per borrower, which is lower than the national average. A relatively small portion (10.19%) of Washington’s population has student loans, making it the 46th most indebted state per capita. However, nearly half (49.3%) of borrowers are under 35 years old.
18. Indiana
Total Borrowers: 924,820
Student Loan Balance: $30.29 billion
Indiana residents have the 18th highest student loan debt in the country. With a total of 924,820 student loan borrowers in the state, the average loan debt per borrower is around $32,874. Around 13.32% of the state’s population is living with student loan debt. Moreover, 51.70% of borrowers are under the age of 35.
17. Colorado
Total Borrowers: 823,520
Student Loan Balance: $30.37 billion
Colorado has an average student debt burden of almost $37,000, which is at par with the national average of $37,300, as per the Education Data Initiative. People in their mid-20s to mid-30s make up the largest share of Colorado residents with federal student loan debt, comprising more than one-third of borrowers. In Colorado, the burden of student loan debt falls most heavily on borrowers between 35 and 49 years old. This age group collectively owes nearly $12 billion in student loans.
16. Arizona
Total Borrowers: 881,940
Student Loan Balance: $31.90 billion
The average student loan debt for Arizona graduates is $36,170. A significant portion (21%) of this debt is non-federal, which can be more expensive for borrowers. The state’s total student loan debt is $31.9 billion, ranking 16th highest among all states. However, the average debt per borrower is the 23rd highest in the country. A relatively low percentage, or 12.19%, of Arizona’s population has student loans, making it the 38th most indebted state per capita. Around 47.7% of borrowers are under 35 years old.
15. Tennessee
Total Borrowers: 880,480
Student Loan Balance: $32.01 billion
Tennesseans account for about $32.01 billion in student loan debt in total. More than 880,000 people in Tennessee have federal student loan debt. On average, they owe $36,360 each. Borrowers aged 35-49 owe the biggest chunk of the total debt, at roughly $12.9 billion.
14. Massachusetts
Total Borrowers: 1,047,560
Student Loan Balance: $37.07 billion
Massachusetts residents face a significant student loan debt burden. Over 1 million residents, or nearly 13% of the population, carry student loan debt. A particularly striking feature is that Massachusetts has the highest percentage of borrowers under 35 years old in the US, at over 63%.
13. Maryland
Total Borrowers: 881,460
Student Loan Balance: $38.13 billion
The average borrower in Maryland owes $43,260. This translates to a total student debt burden of $38.13 billion for the state, spread across nearly 881,460 borrowers. Particularly concerning is the high number of young borrowers, with Maryland having one of the highest proportions of residents between 20 and 30 years old carrying student loan debt. Compared to residents in North Dakota, Maryland owes nearly 44% more in student loans.
12. Virginia
Total Borrowers: 1,168,580
Student Loan Balance: $45.57 billion
Virginia residents carry a high burden of student loan debt. With an average of $38,950 per borrower, Virginia ranks among the states with the highest student debt levels. In total, the state’s residents owe $45.57 billion in student loans, spread across nearly 1.17 million borrowers.
11. New Jersey
Total Borrowers: 1,370,180
Student Loan Balance: $51.12 billion
New Jersey is among the top 15 states with the highest student loan debt. The average borrower in the state owes over $37,000. This is more than $2,000 higher than the national average.
10. North Carolina
Total Borrowers: 1,384,800
Student Loan Balance: $51.84 billion
The average student debt per borrower in North Carolina is $37,440. North Carolina carries a heavy burden of student loan debt. Over 1.38 million North Carolinians have student loans. Borrowers between 35-49 years old hold the most debt, at around $20 billion.
9. Michigan
Total Borrowers: 1,422,640
Student Loan Balance: $52.30 billion
Michigan ranks high in both total and per capita student loan debt. The average student debt per borrower in Michigan is $36,760. Furthermore, Michigan has a significant number of borrowers proportional to its population. Over 1.4 million residents, or 14.05%, carry student loan debt, making it the 9th highest per capita rate in the US. More than half (52%) of these borrowers are under the age of 35.
8. Ohio
Total Borrowers: 1,815,000
Student Loan Balance: $63.37 billion
High tuition costs contribute to Ohio having one of the highest student debt rates per person nationwide. Residents carry a total of $63.37 billion in student loans. The average borrower owes $34,910. Ohio is at the eighth position on our list of states with the highest student loan debt.
7. Illinois
Total Borrowers: 1,705,660
Student Loan Balance: $64.87 billion
The total student loan debt owed by the residents of Illinois is $64.87 billion, while the average student debt per borrower is $38,030. The burden of student debt in Illinois has significantly grown over the past ten years. Many borrowers are older adults, with some over the age of 60 still owing more than $150,000. Recent college graduates are also facing this challenge, with roughly 60% leaving school with an average student loan debt of $28,552.
6. Georgia
Total Borrowers: 1,668,020
Student Loan Balance: $69.62 billion
The total student debt in Georgia sits at $69.62 billion, owed by roughly 1.67 million borrowers. This translates to an average debt of approximately $41,740 per borrower. The largest share of people who borrowed loans are between ages 25-34, while the borrowers between ages 35-49 owe the biggest share at $28.8 billion.
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Disclosure: None. 20 States with the Highest Student Loan Debt is originally published on Insider Monkey.
