In this article, we will be navigating through the 25 states that have trouble with student loan payments. If you wish to skip our detailed analysis, you can move directly to the 5 States That Have Trouble with Student Loan Payments.

The US Student Loan Scenario

As reported by the Federal Reserve, the US outstanding student loan debt remained flat and stood at $1.6 trillion, as of the fourth quarter of 2023. The need for student loans has increased since the tuition costs at colleges have risen. Out of all student debt, federal student loans are more than the private student loans. States with the highest college tuition and fees have been previously discussed.

The Federal Reserve Bank of St. Louis reports gender and racial disparities in student loan debts. Women and people of color tend to have higher debt balances. Simultaneously, higher incomes among men enable them to pay off their debt quicker as compared to women. Generally, Black women and men hold higher student debt relative to their white counterparts. Young Black women have an average loan balance as high as $11,000. You can also view some of the high-paying part-time jobs for college students.

A further analysis of debt statistics in the US reveals that the majority of student loan debt is held by the younger population. Those aged between 25 and 34 owe $500 billion in federal student loans with 14.4 million borrowers. The amount owed by other age groups in student loans includes $110 billion by 24-year-olds and younger, $622 billion by ages 35 to 49, $282 billion by ages 50 to 61, and $98 billion by 62-year-olds and above.

What’s Currently Happening in the US?

President Joe Biden’s first attempt at mass student loan cancellation in 2023 failed after being rejected by the US Supreme Court which entailed that the President overstepped his authority. This plan could have erased some student debt for more than 40 million Americans.

On April 17, CNBC reported that the Biden administration has released a new formal proposal to forgive student debt to offer relief to an estimated 30 million borrowers. The revision has been done to target specific groups of people this time. The new plan would be canceling up to $20,000 in interest for those who currently owe more than what they actually borrowed, excluding individuals with incomes below $120,000 and couples with incomes less than $240,000, and enrolled in income-driven repayment plans. This will address the concerns of more than 25 million federal student borrowers who owe more than the original amount borrowed.

Borrowers who have been in repayment for 20 years or more on their undergraduate loans or for more than 25 years on their graduate loans will be getting full debt cancellation. Those who took out debt to go to low-financial-value institutions that didn’t offer enough financial value will also be given relief. The Biden administration will be reviewing the feedback on the revised plan after a 30-day public comment period through May 17. The final plan is expected to roll out this summer subject to any legal challenges which could arise.

Top Student Loan Providers in the US

Students in the United States subject to financial burden can seek loans from PNC Financial Services Group, Inc. (NYSE:PNC), Citizens Financial Group, Inc. (NYSE:CFG), and Sofi Technologies Inc. (NASDAQ:SOFI). Let’s take a look at what they have to offer in this regard.

PNC Financial Services Group, Inc. (NYSE:PNC) is a bank holding company and financial services corporation. Its banking subsidiary, PNC Bank, offers loans to undergraduate students as well as graduate and professional students who are enrolled at least half-time in a degree or certificate program. Those students for whom government loans and financial aid cannot cover entire expenses can seek a PNC Solution Loan. An undergraduate loan with PNC Bank gives benefits such as flexible repayment options, an easy online application with no application or origination fee, and the ability to access money for tuition and fees, books and supplies, food and housing, travel, and other expenses.

Citizens Financial Group, Inc. (NYSE:CFG) is one of the largest financial institutions in the United States which owns the Citizens Bank. Citizens Bank has a track record of 40 years in the student loan business and provides private student loans to both undergraduate and graduate students. In addition to this, student loan refinancing is also available. The bank’s student loans do not have any origin, application, or disbursement fees. Students can get access to a bigger loan and a lower rate in the case of a cosigner. Some of the worst bachelor’s degrees for student loan debt have also been previously covered.

Sofi Technologies Inc. (NASDAQ:SOFI) provides personal loans, student loans, home loans, and related services. In the case of student loans, the company has low fixed or variable interest rates to offer. Loans for students entering fall, spring, and summer terms are available. With a cosigner, students can prequalify for a SoFi Private Student Loan shortly. A grace period is also allowed to defer private student loan payments for six months after the student graduates.

Now that we have taken a look at the student loan offerings of Financial Services Group, Inc. (NYSE:PNC), Citizens Financial Group, Inc. (NYSE:CFG), and Sofi Technologies Inc. (NASDAQ:SOFI), let’s move to the 25 states that have trouble with student loan payments.

Our Methodology:

In order to compile a list of the 25 states that have trouble with student loan payments, we sourced data from the Federal Reserve Bank of New York. We have chosen the student loan delinquency rate per state as our metric. The delinquency rate is based on the share of loans that are more than 90 days overdue. The most recent data is available from the fourth quarter of 2023. Additionally, the source has reported that missed federal student loan payments will not be reported to credit bureaus until 2024’s fourth quarter. Therefore, less than 1% of aggregate student debt was reported to be delinquent by more than 90 days or in default.

Hence, the states have been ranked in ascending order of their percentage of student debt loan balances overdue by more than 90 days.

25 States That Have Trouble with Student Loan Payments

25. Vermont

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.68%

In the state of Vermont, student loan debt balance overdue by more than 90 days was recorded at 0.68% in 2023’s fourth quarter. Hence, Vermont ranks among the 25 states that have trouble with student loan payments.

24. Kentucky

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.70%

Another state fighting the stress of student loan payments is Kentucky. While the state has a student loan delinquency rate of 0.70%, its student loan debt balance per capita has also increased between 2022 and 2023.

23. New York

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.70%

As of the fourth quarter of 2023, the proportion of student loan debt balance in New York delinquent by over 90 days is 0.70%. This ranks the state 23^rd on our list.

22. Alaska

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.71%

The student loan delinquency rate in Alaska was recorded at 0.71% in 2023’s last quarter. Therefore, student loan payments are an issue in the state.

21. Missouri

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.72%

0.72% of student loan debt balance is overdue by 90 days in the state of Missouri thereby ranking it as one of the states facing trouble with student loan payments.

20. Texas

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.74%

The student loan delinquency rate was last recorded at 0.74% in Texas. This is the 20^th highest rate among all other US states.

19. New Hampshire

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.74%

The per capita student debt loan balance has increased in New Hampshire between 2022 and 2023. The state has one of the highest student loan delinquency rates in the country.

18. Alabama

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.75%

In Alabama, the proportion of student loan balance which is overdue by more than 90 days was reported to be 0.75%. Payment of student loans is a problem in the state.

17. Georgia

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.75%

Students in Georgia also fail to make payments on time. The student loan delinquency rate in the state is 0.75% as of the fourth quarter of 2023.

16. Utah

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.75%

0.75% of student loan debt balance remains overdue by greater than 90 days in Utah. The state has a per capita student loan debt balance of $4,230.

15. Arizona

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.78%

Students are also behind on their payments in the state of Arizona. The state’s student loan delinquency rate is the 15^th highest in the United States.

14. South Carolina

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.79%

South Carolina ranks as one of the states struggling with student loan payments. The proportion of student debt loan balance overdue by more than 90 days in the state is 0.79%.

13. Connecticut

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.79%

Required student loan payments are not made on time in Connecticut. 0.79% of the state’s student loan debt balance remains overdue.

12. West Virginia

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.81%

Delay in student loan payments is faced by West Virginia as well. As of 2023, the state’s student loan debt balance per capita is $4,500.

11. North Dakota

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.83%

As reported by the Federal Reserve Bank of New York, student loan debt balance overdue by greater than a duration of 90 days in North Dakota is 0.83%. This ranks the state 11^th on our list.

10. Delaware

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.85%

Delaware is one of the states that have trouble with student loan payments. 0.85% of student loan debt balance remains overdue in the state.

9. Florida

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.87%

With a student loan delinquency rate of 0.87%, Florida ranks as another state where student loan payments are not made timely.

8. Louisiana

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.87%

Student loan delinquency is prevalent in Louisiana. As of 2023, the student loan debt balance per capita in the state is $5,980.

7. Wyoming

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.88%

The state of Wyoming is troubled with student loan payments. The proportion of student loan debt balance overdue by more than 90 days in the state is 0.88%.

6. New Jersey

Percent of Student Loan Debt Balance 90+ Days Delinquent: 0.91%

As of the last quarter of 2023, the student loan delinquency rate in New Jersey is 0.91% and the 6^th highest in the US. Hence, New Jersey ranks among the 25 states that have trouble with student loan payments.

Click to continue reading and see 5 States That Have Trouble with Student Loan Payments.

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Disclosure: None. 25 States That Have Trouble with Student Loan Payments is originally published on Insider Monkey.