July 3rd, 2013
Top 10 States with the Highest Student Loan Debt
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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?
- Washington, DC – $45,731
- Maryland – $33,660
- Georgia – $32,961
- Illinois – $31,864
- New Jersey – $31,214
- Virginia – $30,962
- Massachusetts – $30,800
- New York – $30,638
- Mississippi – $30,200
- 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.
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 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.