The average student debt for a bachelor’s degree among the class of 2019 was $28,950. And with the average cost of college in the US reaching $35,720 per year, student debt isn’t showing any signs of slowing down.
A new study by WalletHub examines the states that are friendliest toward student-loan debtors comparing the 50 states and the District of Columbia across two key dimensions: Student-Loan Indebtedness and Grant & Student Work Opportunities. The study evaluates those dimensions across 11 metrics — from the proportion of students with debt to student debt as share of income.
West Virginia, New Hampshire, and Pennsylvania rank among the states with the most student debt. States with the least student debt include Hawaii, Colorado, and Alaska. Utah has the lowest average student debt at $17,935, roughly two times lower than in New Hampshire, which holds the highest average student debt at $39,410.
Student debt can be crippling for college grads, but experts say that the debt issue also negatively affects the overall economy.
“The biggest effect of student debt on the economy is that it increases inequality,” says Charlie Eaton, Assistant Professor of Sociology at the University of California, Merced and Affiliated Faculty at the University of California, Berkeley Center for Studies in Higher Education,. “This is because students from wealthy families can go to college debt-free. Everyone else must borrow. But student loan debt also limits the ability of more than 40 million Americans to get home loans, auto loans, or other consumer credit. This limits their ability to build household wealth, start businesses, and more. This may limit overall economic growth.”
Since January, President Biden has cancelled more than $9 billion dollars worth of student debt. And while that has helped lighten the load, many say that more has to be done to truly level the playing field.
“What we know of debt, when we compare children who graduated from college, one with debt and one without debt, the kids with debt do worse in building assets,” says William Elliott III, Professor of Social Work, Director, Joint Doctoral Program in Social Work and Social Science at the University of Michigan. “This is a question about equity and the ability of education to serve as an equalizer.”
To see how states rank across all student debt dimensions, click here to access WalletHub's data.
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