Student Loan Debt: The Ten Worst States

Alan Collinge
4 min readMar 28, 2022

None of the states are good, but the South is remarkably bad.

Student debt stands at around $1.8 Trillion in the U.S. today. This is not good for any of the states. However, it is instructive to look closely at the states, to see which are most severely affected. Specifically, it is useful to analyze the average debt burden for borrowers in the various states against typical earnings for individuals in those states.

Considering recent Department of Education student loan data, state earnings data from the Bureau of Labor Statistics, and estimates of private student loan debt reveals that there is a wide disparity among the states in the ratio of student loan debt to average earnings. Massachussetts is the “best” state by this measure (average debt-to-earnings ratio of .54), while Mississippi is the worst (debt-to-earnings ration of .98). The difference is stark.

What is most notable, however, is looking at these results geographically. When mapping the worst states best states, we see a clear and obvious trend: Southern, historically conservative states are clearly suffering the worst impact from this debt, while more liberal, coastal states (both Pacific and Atlantic) are clearly faring the best.

Average student loan debt vs. average earnings, ten best and worst states

Further analysis reveals that this trend is not isolated to the extremes. Of the worst 25 states, 22 are historically conservative, “Red” states. Conversely, of the 25 “best” states, 17 are historically liberal, “Blue” states. See the full state ranking below.

Despite popular misconceptions, most student loan borrowers are republican or independent.

Make no mistake: None of the states are fairing well under this debt burden. Before the pandemic, the Brookings Institute estimated that student loan defaults for the Class of 2004 would reach 40%. This is double the default rate for subprime home mortgages. These borrowers, however, were borrowing less than a third (roughly $13,000) of what is borrowed today (roughly $39,000).

In 2019, Education Secretary Betsy DeVos acknowledged that 75% of all federal student loan borrowers were “unable to pay down their loans”. Wayne Johnson, the Federal Student Aid Director, said that this was closer to 80% in the first months of 2020. Department of Education data for that time period shows that more than half of all borrowers (64.3% when including $0 payers in Income Driven Repayment plans) weren’t paying at all.

Source: Department of Education Loan Status Report

More disturbing: More than half of all borrowers are now over 35 years old, not under 35, and people over 50 with student loans now outnumber people under 25. For both of the older groups, they owe far more than their younger counterparts, despite having borrowed far less many years or decades ago.

Source: U.S. Department of Education (Q4 2020)

Equally disturbing: student loan debt in over a third of U.S. States now exceeds their state budgets. Again, this is most prominent in historically red, conservative states. Georgia’s state budget is $48 Billion, for example. The people of Georgia, however, owe an astonishing $82 Billion in mostly federal student loan debt.

Political scientists, and politicians of all stripes should be paying close attention to these data, and also realize that this is the largest untethered voting bloc in modern U.S. History. Given the tendency for conservative members of Congress and their advisors to oppose all manner of student loan reform, and given recent republican losses in states like Georgia, it should be clear that this problem is only getting worse- much worse- for the GOP, politically.

At a minimum, the republicans should be fighting to restore constitutional bankruptcy protections to these loans and holding the colleges accountable by passing S.2598. At this late date, however, it may be more expedient to simply cancel the loans, and replace the entire federal lending program with something less costly and more effective for all involved.

Source: Department of Education, Bureau of Labor Statistics



Alan Collinge

I am Founder of StudentLoanJustice.Org, author of The Student Loan Scam (Beacon Press), and creator of the petition Change.Org/CancelStudentLoans