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August 02, 2024 at 12:45 PM
Next to mortgages, student loans make up the largest component of household debt for Americans and continue to grow, according to a new report from WalletHub, a personal finance website.
At the end of the second quarter, total outstanding college-loan balances stood at some $1.6 trillion, the report said, citing Department of Education data. That means each of the 42.8 million borrowers owes an average of nearly $38,000.
“College keeps getting progressively more expensive, and so does borrowing money to attend,” WalletHub analyst Cassandra Happe said in a statement. “Federal student loan interest rates are rising to a 12-year high for the upcoming academic year, so it’s important to plan carefully when borrowing.”
The report said the burden of student loans is not the same across the country.
In order to determine the best and worst states for student debt, WalletHub compared the 50 states and the District of Columbia across two key dimensions:
- Student-loan indebtedness, including proportion of students with debt, student debt as a share of income and share of student loan borrowers 50 and older
- Grant and student work opportunities, including unemployment rate among population aged 25 to 34, availability of student jobs and grant growth
Happe said that besides attending college in a less expensive state and seeking grants and financial aid, students should carefully calculate how much they can afford to borrow before taking out a loan.
See the gallery for the 12 worst states for student loan debt.
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