With the average student loan debt reaching over $37,000 per borrower, the personal-finance website WalletHub has released its report on 2023’s States with the Most and Least Student Debt, as well as expert commentary.

To determine the states that are friendliest toward student-loan debtors, WalletHub compared the 50 states and the District of Columbia across 12 key metrics. The data set ranges from average student debt to unemployment rate among the population aged 25 to 34 to share of students with past-due loan balances.

California ranked 47th on the list, among the five lowest student debt states, followed by Wyoming, New Mexico, Hawaii and, the state with the lowest student debt, Utah.

At the top of the list, states with the most student debt were, Pennsylvania at number one, followed by Delaware, Mississippi, West Virginia and South Dakota rounding out the top five.

Student Debt in California (1=Most; 25=Avg.):

49th – Avg. Student Debt

46th – Proportion of Students with Debt

48th – Student Debt as percentage of Income (Adjusted for Cost of Living)

25th – Percentage of Student Loans Past Due or in Default

38th – Availability of Paid Internships

37th – Grant Growth

For the full report, visit: https://wallethub.com/edu/best-and-worst-states-for-student-debt/7520

Expert Commentary

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

“First, study the price of the schools you want to attend, including housing, meals, books, and transportation back and forth. There is a wild variation in prices, but paying more does not guarantee you will learn more or earn more. In fact, if you cannot afford the school you choose and later have to withdraw, the money you spent to enroll may gain you little or nothing. Non-tuition costs also vary widely; a city campus in New York or San Francisco can bust a student’s housing budget (but may have more opportunities for part-time jobs for students). Tuition is one element, but only one, in the financial picture. Investigate financial aid, including not only loans but also scholarships, grants, work-study programs, and any other creative alternatives you can find. Local organizations like Rotary, Lions, and educational charities help students finance education. In some programs, a commitment to serve the community after graduation subsidizes tuition. Do not shy away from opportunities to work while studying. Part-time jobs abound at and near universities during breaks and in the summer. Those serious about education may have to work to pay for it. Be willing to invest in yourself.”

Andrea Lee Negroni – Adjunct Associate Professor, American University

“Three things I encourage students to consider are scholarships, a job, and community college. No matter what college a student goes to, there are so many scholarship opportunities. I always encourage students to treat applying for scholarships like a part-time job. The payoff can be huge. Students can apply for university-level scholarships, national ones (although they are harder to get), and a third area would be to pursue scholarships from the student’s local community. Having a part-time job while in college and bumping it up to full-time in the summer is a great way to earn money that can be used toward paying for college and living expenses. Every dollar earned can lessen the amount of loans that need to be accepted while in college. A third option is to attend a community college for two years prior to enrolling in a four-year institution. Tuition and fee charges are typically much lower (and scholarships for academics and sports can be found). I would encourage the student, however, to meet with both academic advisers at the community college and the four-year university that they wish to attend to ensure that all classes will transfer.”

Andrew Waldum, MBA, CFP – Chair, Personal and Family Financial Planning; Associate Professor, University of Arizona

How does the growth of student loan debt affect the economy?

“It has been clear for at least two decades that it has impeded two generations and counting, causing them to put off getting married, having families, buying houses, etc. It compounds the other expenses they have.”

Jeffrey J. Williams – Professor, Carnegie Mellon University

“There is some evidence of later family formation and home purchasing on account of student loan debt. More research is needed to know what is really happening. Certainly, more than just student loans are at play in making housing and family decisions.”

Jonathan Fox – Professor, Iowa State University

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and the employability of the degree or field?

“I think that installs inequality: certain pursuits are then only available to those from wealthy families. Shouldn’t education be open? Besides that, results sometimes shift: for instance, computer coding was lucrative thirty years ago but is less valuable now, done offshore or by AI, so the return has decreased over the past 30 years. And it has been shown that humanities degrees, while having a low short-term ROI, often have better long-term results.”