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With the average student loan debt reaching over $39,000 per borrower, the personal-finance website WalletHub today released its report on 2025's States with the Most and Least Student Debt, as well as expert commentary.
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.
Student Debt in New Hampshire (1=Most; 25=Avg.):
For the full report, please visit:
https://wallethub.com/edu/best-and-worst-states-for-student-debt/7520
"College keeps getting progressively more expensive, and so does borrowing money to attend. Federal student loan interest rates recently hit a 12-year high, but they're expected to ease slightly for the upcoming academic year, so it's still important to plan carefully when borrowing. In addition to attending college in a less expensive state and pursuing other avenues of funding like financial aid and grants, students should also carefully calculate how much they can afford to borrow before taking out a loan."
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"Mississippi has the biggest student debt problem in the country. The average amount owed by people with student loan debt equals about 56% of the median income in the state, the highest rate in the U.S. In addition, Mississippi has the 14th-highest default rate on student debt. One reason why student borrowers are struggling in Mississippi is that they are having a hard time finding jobs - the state has the fourth-worst availability of jobs to students, and the second-lowest share of paid internships."
- Chip Lupo, WalletHub Analyst
Expert Commentary
What tips can you offer students looking to minimize the amount of debt they take out for higher education?
"Students should avoid for-profit colleges. When choosing colleges, they should pay attention to four-year graduation rates. They need to be especially skeptical of pursuing post-baccalaureate degrees; if they think they might want to do a post-baccalaureate degree, they should try to interview a variety of recent grads (NOT just those suggested by the program) to see how they ended up."
Joshua Klugman - Associate Professor, Temple University
"One...would be the possibility of taking placement exams for course credit at a much lower cost or enrolling for an online course option to save on commuting and meal expenses if applicable. Additionally, If your institution offers flat rate tuition above a certain number of hours of enrollment, consider the possibility of saving tuition costs, and reducing loan debt, by enrolling for additional hours per term... If you are conducting college financial planning in advance of beginning your college career, consider dual credit coursework while enrolled in high school or perhaps even consider enrolling at a local community college for a year or two before transferring into a traditional university as a path to minimize debt while still earning your credential... Room and board cost reductions may be possible for students who serve in various capacities, i.e., dorm/hall manager etc. Seek those possibilities out if you are so inclined. When contracting for a dorm and meal plan, truly consider where you reside and the number of meals you will eat on campus... The most common area of room and board savings for those living on campus typically revolve around a single vs double room, i.e., living with or without roommates. Consider savings in that area as well... With regards to transportation, again the obvious comes to mind. Do you absolutely need private transportation while at school? Would the institution's or city's transportation options be sufficient?... Within the category of books and supplies, most students are keenly aware of discount book vendor sites and buying used vs new books. If at all possible, purchase digital copies instead of paper copies. Does the school library offer the resource for free?"
Joe P. Wilcox, Ph.D. - Program Director and Faculty Specialist, Executive Ed.D. in Higher Education Leadership Program, The University of Texas at Austin
How does the growth of student loan debt affect the economy?
"It definitely does not help. We know that debt levels are low for low-income students who did not manage to get a degree, but even those modest levels of debt can be crippling for low-income households."
Joshua Klugman - Associate Professor, Temple University
"The servicing of any debt impacts both the borrower and the lender. In the case of the borrower, outstanding student debt is often said to impact or delay life milestones such as big ticket purchases. Typically this means the delay in purchasing a car or home, or in the best case scenario it impacts being able to purchase either item but at a higher interest rate or lower quality than desired due to a less than desirable debt to income ratio used by lenders when approving loans. Basically, money earmarked to pay back student debt, whether in student loans or credit cards, is interpreted to mean that less disposable income is available for general purchases or consumer spending. The domino effect is that reduced consumer spending impacts the economy as borrowers saddled with debt typically spend less on non-essential purchases such as dining out or retail items, and borrowers also reduce or eliminate their savings to maintain a basic standard of living. Student debt also impacts potential business start-ups which in turn impacts the nation's gross domestic product. There is also a positive correlation between those with higher debt loads and those who participate in social support programs run by the government. For lenders, both private and the federal government, the primary economic impact of increasing student loan debt is associated with the costs in servicing the outstanding debt. Debt servicing costs are a significant part of any budget and the more that is set aside to service debt leaves less to use in other areas of the economy."
Joe P. Wilcox, Ph.D. - Program Director and Faculty Specialist, Executive Ed.D. in Higher Education Leadership Program, The University of Texas at Austin
How should students and their parents think about the return on investment for spending on higher education?
"An 'ROI' approach to thinking about higher education is reasonable, but there are benefits to higher education other than direct vocational skills, and arguably with the rise of AI majors that help people think critically might become more valuable than majors that supposedly have a direct pipeline to professions (e.g. computer science, business degrees)."
Joshua Klugman - Associate Professor, Temple University
"ROI does not have a universal definition that is accepted by everyone. So, the challenge of assessing ROI will always be a case specific decision. For example, there isn't a specific type of university, or specific major, that provides the best return on investment. To some, a community college and 4-year institution have equal ROI in terms of future impact, likewise the distinction between majors and prospects for a substantial future salary vary by the one who is making the assessment. Some will see a higher ROI in specific areas of study but does their ROI formula consider more than the average salary of an occupation? How about workforce forecasts, impacts of emerging technology on occupational outlook, or even societal impact or regulatory constraints enacted by the government on an occupation. Cost of attendance is often at the top of many consumer lists when determining value when assessing ROI. However, there are countless other variables that impact ROI, not the least of which is defining ROI itself."
Joe P. Wilcox, Ph.D. - Program Director and Faculty Specialist, Executive Ed.D. in Higher Education Leadership Program, The University of Texas at Austin
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.
Student Debt in New Hampshire (1=Most; 25=Avg.):
- Overall Rank: 2nd
- 1st - Avg. Student Debt
- 2nd - Proportion of Students with Debt
- 1st - % of Student Loans Past Due or in Default
- 3rd - Grant Growth
For the full report, please visit:
https://wallethub.com/edu/best-and-worst-states-for-student-debt/7520
"College keeps getting progressively more expensive, and so does borrowing money to attend. Federal student loan interest rates recently hit a 12-year high, but they're expected to ease slightly for the upcoming academic year, so it's still important to plan carefully when borrowing. In addition to attending college in a less expensive state and pursuing other avenues of funding like financial aid and grants, students should also carefully calculate how much they can afford to borrow before taking out a loan."-
"Mississippi has the biggest student debt problem in the country. The average amount owed by people with student loan debt equals about 56% of the median income in the state, the highest rate in the U.S. In addition, Mississippi has the 14th-highest default rate on student debt. One reason why student borrowers are struggling in Mississippi is that they are having a hard time finding jobs - the state has the fourth-worst availability of jobs to students, and the second-lowest share of paid internships."
- Chip Lupo, WalletHub Analyst
Expert Commentary
What tips can you offer students looking to minimize the amount of debt they take out for higher education?
"Students should avoid for-profit colleges. When choosing colleges, they should pay attention to four-year graduation rates. They need to be especially skeptical of pursuing post-baccalaureate degrees; if they think they might want to do a post-baccalaureate degree, they should try to interview a variety of recent grads (NOT just those suggested by the program) to see how they ended up."
Joshua Klugman - Associate Professor, Temple University
"One...would be the possibility of taking placement exams for course credit at a much lower cost or enrolling for an online course option to save on commuting and meal expenses if applicable. Additionally, If your institution offers flat rate tuition above a certain number of hours of enrollment, consider the possibility of saving tuition costs, and reducing loan debt, by enrolling for additional hours per term... If you are conducting college financial planning in advance of beginning your college career, consider dual credit coursework while enrolled in high school or perhaps even consider enrolling at a local community college for a year or two before transferring into a traditional university as a path to minimize debt while still earning your credential... Room and board cost reductions may be possible for students who serve in various capacities, i.e., dorm/hall manager etc. Seek those possibilities out if you are so inclined. When contracting for a dorm and meal plan, truly consider where you reside and the number of meals you will eat on campus... The most common area of room and board savings for those living on campus typically revolve around a single vs double room, i.e., living with or without roommates. Consider savings in that area as well... With regards to transportation, again the obvious comes to mind. Do you absolutely need private transportation while at school? Would the institution's or city's transportation options be sufficient?... Within the category of books and supplies, most students are keenly aware of discount book vendor sites and buying used vs new books. If at all possible, purchase digital copies instead of paper copies. Does the school library offer the resource for free?"
Joe P. Wilcox, Ph.D. - Program Director and Faculty Specialist, Executive Ed.D. in Higher Education Leadership Program, The University of Texas at Austin
How does the growth of student loan debt affect the economy?
"It definitely does not help. We know that debt levels are low for low-income students who did not manage to get a degree, but even those modest levels of debt can be crippling for low-income households."
Joshua Klugman - Associate Professor, Temple University
"The servicing of any debt impacts both the borrower and the lender. In the case of the borrower, outstanding student debt is often said to impact or delay life milestones such as big ticket purchases. Typically this means the delay in purchasing a car or home, or in the best case scenario it impacts being able to purchase either item but at a higher interest rate or lower quality than desired due to a less than desirable debt to income ratio used by lenders when approving loans. Basically, money earmarked to pay back student debt, whether in student loans or credit cards, is interpreted to mean that less disposable income is available for general purchases or consumer spending. The domino effect is that reduced consumer spending impacts the economy as borrowers saddled with debt typically spend less on non-essential purchases such as dining out or retail items, and borrowers also reduce or eliminate their savings to maintain a basic standard of living. Student debt also impacts potential business start-ups which in turn impacts the nation's gross domestic product. There is also a positive correlation between those with higher debt loads and those who participate in social support programs run by the government. For lenders, both private and the federal government, the primary economic impact of increasing student loan debt is associated with the costs in servicing the outstanding debt. Debt servicing costs are a significant part of any budget and the more that is set aside to service debt leaves less to use in other areas of the economy."
Joe P. Wilcox, Ph.D. - Program Director and Faculty Specialist, Executive Ed.D. in Higher Education Leadership Program, The University of Texas at Austin
How should students and their parents think about the return on investment for spending on higher education?
"An 'ROI' approach to thinking about higher education is reasonable, but there are benefits to higher education other than direct vocational skills, and arguably with the rise of AI majors that help people think critically might become more valuable than majors that supposedly have a direct pipeline to professions (e.g. computer science, business degrees)."
Joshua Klugman - Associate Professor, Temple University
"ROI does not have a universal definition that is accepted by everyone. So, the challenge of assessing ROI will always be a case specific decision. For example, there isn't a specific type of university, or specific major, that provides the best return on investment. To some, a community college and 4-year institution have equal ROI in terms of future impact, likewise the distinction between majors and prospects for a substantial future salary vary by the one who is making the assessment. Some will see a higher ROI in specific areas of study but does their ROI formula consider more than the average salary of an occupation? How about workforce forecasts, impacts of emerging technology on occupational outlook, or even societal impact or regulatory constraints enacted by the government on an occupation. Cost of attendance is often at the top of many consumer lists when determining value when assessing ROI. However, there are countless other variables that impact ROI, not the least of which is defining ROI itself."
Joe P. Wilcox, Ph.D. - Program Director and Faculty Specialist, Executive Ed.D. in Higher Education Leadership Program, The University of Texas at Austin
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