Student loan debt has plagued college graduates for years, with the current level of US debt reaching a record $1.76 trillion. Nationally, student loan debt has declined since the pandemic began, thanks in part to economic relief efforts such as the CARES Act. Although there was a 2.7% increase in 2021 compared to 2020, this is the lowest year-over-year increase in the past decade, even with the long pause in refunds federal student loans due to the COVID-19 pandemic. President Biden announced another extension for federal borrowers through August 31, 2022, to provide further relief.
Student loan debt plays a huge role in restricting financial freedom. Compared to other generations, more millennials have some form of student loan debt. Although they didn’t have the highest average debt compared to other generations like Gen X or baby boomers, about 14.8 million millennials still had some student loan debt to pay off, according to Education Data. . This is one of the reasons millennials have put off big purchases like buying a home; their aversion to debt prevents them from taking out additional loans, including mortgages.
Sound Dollar ranked the states with the highest percentage of student loan delinquencies using 2021 data from the FRBNY Consumer Credit Panel/Equifax. States are sorted by their proportion of student borrowers with accounts past due for more than 90 days. The dataset also includes the total number of student borrowers in each state, as well as the average student debt balance for each state. Both federal and private student loans are covered in this dataset.
Of all the states mentioned on this list, 10 out of 13 are located in the southern region of the United States. Student loan debt is also the second highest category of consumer debt, mortgages being the first. The Federal Reserve dataset lists the average student debt balance among borrowers in the United States at $36,200.