July 3rd, 2013

Top 10 States with the Highest Student Loan Debt

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Top 10 States with the Highest Student Loan Debt | Credit Karma Blog

Students heading back to school this fall with new student loans could be shelling out more money. The deadline to raise the federal student loan rate passed without a vote on July 1st. Congress left for the their July 4th recess with no resolution, allowing interest rates on new subsidized Stafford loans to increase to 6.8 percent from 3.4 percent.

Just how much more will college students be paying? According to the Joint Economic Committee, on average students would pay an estimated $2,600 extra in interest over the life of the loan.

Here at Credit Karma we analyze data each month comparing the credit and debt pulse of Americans. Last month we looked at U.S. cities with the lowest credit scores. This month in light of the interest rate increase we thought it was a good time to look at the current state of student loan debt among U.S states.* How does your state stack up?

  1. Washington, DC – $45,731
  2. Maryland – $33,660
  3. Georgia – $32,961
  4. Illinois – $31,864
  5. New Jersey – $31,214
  6. Virginia – $30,962
  7. Massachusetts – $30,800
  8. New York – $30,638
  9. Mississippi – $30,200
  10. Alabama – $30,165

What the Numbers Say

Many of the states on the list aren’t too surprising because they contain major cities where recent grads tend to flock for good jobs. Washington DC is one place with a steady opening of jobs because of all the federal government opportunities. In other states on the list–including Illinois and Mississipp–the opposite is true. Unemployment is still on the rise leaving many consumers unable to make ends meet including paying down their student loans. Unemployment rates for May show Illinois and Mississippi with nearly the highest rates only beating out Nevada. Illinois ranked 50th with 9.3 percent and Mississippi came in at 49th with 9.1 percent.

Final Thoughts

One important thing to note, the increased interest rate will only affect new Stafford student loans applied for after July 1, 2013. Congress plans to take the issue back up when they return from their break as early as July 10th. There is still a chance for them to reach an agreement before most students apply for new loans in August.

If you have any concern about paying back your student loans check out this resource for information on different repayment options available.

Amy

Amy Leone is the Public Relations Coordinator at Credit Karma. Before joining the team in June 2012 she spent most of her career as a TV news producer. When she’s not helping promote Credit Karma on a variety of media outlets, she’s probably out running or exploring her new state of California.

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**These numbers come from our May 2013 data. We took a look at the credit scores of the 1,690,526 of Credit Karma members total, ages 18 and above.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

8 Comments

  1. I’m surprised Alabama is listed as number 10 with the average debt load of only $30,165. I’m an Alabama resident and graduate of a school in Alabama and my BBA is costing me nearly $60,000 presently. Because I haven’t been able to obtain employment my debt is still in deferment with interest compounding every year that I’m not able to pay at least the interest payment which is currently close to $4,000 right now.

    Jennifer Keller at 4:55 pm on July 5, 2013
  2. I’m really curious to see how the rate change effective July 1st changes students and parent’s perspective on borrowing money for education.

    Simple Start SEO at 2:00 pm on July 6, 2013
  3. First of all how irresponsible to leave work and not vote. Shame on Congress for that one. Secondly, I hope the people in those 10 states are also earning much more than the rest of the country in order to make up for that much debt!

    Mike at 10:33 am on July 9, 2013
  4. The student loan debt will never be solved until the huge profits are taken out.There should be more alternatives to financing / paying for college. ProjectTuitionReimbursement
    Needed badly Checks and Balance of existing programs to cut waste and fraud I am trying to keep awareness and to find solutions to the now $1.2 Trillion student loan debt crisis that is now growing it’s fastest rate to date. Congress will have you believe if they can keep the interest rate at 3.4% the student loan debt crisis is solved! Not even a start !! to solving this massive problem that will be our next big Bubble………….. and it will Bust!

    Anthony Eller at 9:49 am on July 10, 2013
  5. I think it is terrible that the student loan debt has grown to these levels. It shows there is a systematic issue of the way we educate our young in this country and what we are charging them for a so called higher education.

    Most of this knowledge can be learned through free sites like KahnAcademy.org. This kind of technology will change the way students learn in the future and will therefore make these institutions have to reduce the amounts they charge for education. These kids are our future and we are saddling them for their own educations while giving billions out to other countries and wasting so many dollars. I think if any debt should be wiped out or forgiven it should be student loan debt.

    Steve at 9:38 am on July 11, 2013
  6. Absolutely shocking that congress would allow the interest rates to be increased by so much. Surely in the current financial climate they would have sorted this one out before shooting of on recess.

    Kevin Cross at 6:55 am on July 14, 2013
  7. I joined the military right out of high school and never had the displeasure of racking up student loan debt. I only lasted 7 years in the military but had I gone to college, the debt would have last me for 20 years. I make in the mid 45k to 50k range right now at my job and would have probably made the same with a degree.

    zimmy@moneyandpotatoes.com at 11:46 am on July 20, 2013
  8. Needed badly Checks and Balance of existing programs to cut waste and fraud

    life insurance quotes at 12:17 am on July 22, 2013

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