The Worst States For Repaying Student Loans 2016
When it comes to paying off your student loans, "quick" and "easy" are two words that don't get thrown around very often. However, graduates in some states may have a quicker or easier time of it than others, thanks in part to lower overall tuition, accessible scholarship programs, higher wages for college graduates and other advantages.
These 10 states, however, are on the other end of the spectrum. Whether it's a sluggish economy or any number of factors, students in the following states might be in for a long uphill climb to get their student loan balance to zero.
To figure out the best and worst of them, we ranked all 50 states on 7 data points. They are:
- Median annual income for bachelor’s degree holders, adjusted for the cost of living, 2014
- Unemployment rate, December 2015
- Percentage of the graduating class of 2014 with student debt
- Average amount of student debt owed by graduates in the class of 2014 who took out student loans
- Percentage of graduates who start paying off their student loans within 3 years, 2013
- Average in-state undergraduate tuition and fees for all four-year schools in each state, 2014
- Average growth rate for all jobs in a state and the estimated number of annual job openings per capita, 2012-22
Jump to our methodology at the end of the article, in case you want to see exactly what data we chose and how it was weighted, but we'll go ahead and name names first. Here are the 10 states where your student loans might loom large in your post-college life, and a chart of key data points on all 50 states we ranked, below.
Despite fairly strong economic growth numbers gathered by Projections Central, students in Florida seem to be having a difficult time chipping away at their student loan balances. The percentage of graduates who have paid down loans within three years is the lowest out of all states on this list, and the Sunshine State's higher-than-average unemployment rate (as of December 2015) and a lower-than-average median annual salary (adjusted for cost of living) for college graduates may have something to do with that. The numbers do show a 16.7 percent average rate of job growth across the state from 2012-2022, however, so things may be looking up for future student borrowers.
Key data points for Florida:
- Unemployment rate: 5.1 percent
- Unemployment rate rank: No. 30
- Median adjusted annual income for bachelor's degree graduates: $41,892
- Median adjusted income rank: 34
- Three-year loan repayment rate: 56.7 percent
9. New York
For the class of 2014, approximately 61 percent of students in New York graduated with some form of student debt, which makes a fair amount of sense when you consider the average price of college in the Empire State. The yearly in-state tuition and fees average of $17,546 came in at No. 43 on our affordability metric, and the average amount of student debt per borrower in the state also came above the average of the states in our ranking. The unemployment rate in New York was actually about average compared to the U.S. mean, at 5 percent, but the state's nationally No. 3-ranked cost of living can make loan repayment something of a tricky proposition.
Key data points for New York:
- Yearly average tuition and fees: $17,546
- Yearly tuition and fees rank: No. 43
- Average amount of student debt per borrower: $27,822
- Average amount of student debt rank: No. 31
- Portion of graduates with student loan debt: 61 percent
Oregon is a state full of natural beauty, but the outlook for student borrowers isn't so scenic. The total average student debt per borrower who graduated in the Beaver State in 2014 came in at $26,106, but the median college graduate's salary was only $37,450. It's not all bad news, though — Oregon's average job growth rate for all jobs ranked at No. 9 among all 50 states we ranked, with the growth rate for 2012-2022 predicted at 15.4 percent.
Key data points for Oregon:
- Average amount of student debt per borrower: $26,016
- Average amount of student debt rank: No. 21
- Median adjusted annual income for bachelor's degree graduates: $37,450
- Median adjusted income rank: No. 47
- Unemployment rate: 5.5 percent
With an median annual college graduate salary nearly identical to Oregon's and a tuition and fees average thousands of dollars higher than New York's, Vermont students are likely to find themselves stuck between a rock and a hard place when trying to pay off their student loans. That's not all, either — the average student debt load per graduate in the class of 2014 came to $29,060. As of December 2015, the unemployment rate in Vermont was a fairly low 3.5 percent, which suggests that job opportunities may be more readily available for qualified applicants.
Key data points for Vermont:
- Yearly average tuition and fees: $26,559
- Yearly tuition and fees rank: No. 49
- Average job growth rate, 2012-2022: 8.5 percent
- Median adjusted annual income for bachelor's degree graduates: $37,429
- Median adjusted income rank: No. 48
6. Rhode Island
The only state in the U.S. with a higher average cost of college than Vermont is Rhode Island, where students paid an average of $27,850 per year in tuition and fees in 2014. Even though they may be offset year over year by grants, scholarships or other non-borrowed aid, those tuition rates help lead to substantial debt after graduation — in Rhode Island, the class of 2014 left school with an average debt load of $31,841. Despite all this, 89 percent of Rhode Island student borrowers were able to start paying off their within three years.
Key data points for Rhode Island:
- Yearly average tuition and fees: $27,850
- Yearly tuition and fees rank: No. 50
- Average amount of student debt per borrower: $31,841
- Average amount of student debt rank: No. 47
- Median adjusted annual income for bachelor's degree graduates: $40,498
The tuition and fees average in Connecticut was also somewhat elevated, coming in at $17,763 per year in 2014 and ranking No. 44 out of 50 in affordability, and the state's median salary for college graduates was the second-lowest of any upper Atlantic state. Add that to a higher-than-average unemployment rate (ranked No. 32 out of 50 states) at 5.4 percent compared to December 2015's national 5.0 percent unemployment rate, and you've got a recipe for difficulty in wiping the student loan slate clean.
Key data points for Connecticut:
- Average amount of student debt per borrower: $29,750
- Average amount of student debt rank: No. 43
- Median adjusted annual income for bachelor's degree graduates: $37,920
- Median adjusted income rank: No. 46
- Average job growth rate rank, 2012-2022: No. 35
4. South Carolina
South Carolina didn't bottom out in any one category, but its income, employment and average student debt figures all landed squarely on the south side of average. The Palmetto State ranked at No. 32 nationwide for unemployment rate, No. 38 for median yearly college graduate salary, No. 42 for total job openings per capita and No. 39 in our three-year loan repayment category. The moderately affordable cost of living in South Carolina might help offset some of the strikes against it, but even in the 23rd-most affordable state in the U.S. you might find your loan payments stretching your salary somewhat thin.
Key data points for South Carolina:
- Median adjusted income for bachelor's degree graduates: $41,310
- Median adjusted income rank: No. 38
- Average amount of student debt rank: No. 36
- Unemployment rate: 5.5 percent
- Average job growth rate, 2012-2022: 11.5 percent
In our article on the best states for repaying college loans, employment availability came to the forefront as a cornerstone of the process of getting rid of your loan debt. The numbers show that Mississippi, despite boasting the fifth-lowest tuition and fees average in the nation, may have a few problems transitioning its students to the workforce. First of all, the state's unemployment rate was 6.8 in December 2015, good enough for the very bottom spot on the national rankings list. Projected job growth lags a few percentage points behind the average of states in our study, also, at 7.0 percent between 2012 and 2022, and the state also ranked last in the category of expected job openings per capita.
Key data points for Mississippi:
- Unemployment rate rank: No. 50
- Median adjusted income rank: No. 33
- Job growth rate rank: No. 45 (tie)
- Total annual job openings projected: 36,300
- Annual job openings per capita rank: No. 50
2. West Virginia
Job availability is again the crux of the problem in West Virginia, where 69 percent of graduates in the class of 2014 carried a student loan debt burden after leaving school. The state's unemployment rate was better than Mississippi's, although not by much, and the exact same thing could be said for its per capita job openings as projected by WorkForce West Virginia. Perhaps most frightening of all to prospective graduates was the fact that less than 1 percent growth is expected statewide between 2012 and 2022, while the mean of state averages came to 11.6 percent for the same period.
Key data points for West Virginia:
- Average job growth rate, 2012-2022: 0.4 percent
- Job growth rate rank: No. 50
- Unemployment rate: 6.2 percent
- Unemployment rate rank: No. 45
- Portion of 2014 graduates with student debt rank: No. 43 (tie)
Most of the states in the bottom 10 have been either largely rural or in New England, so it's only fitting that the No. 1 worst state for repaying student loans is the largest and most rural New England state. Maine's median annual salary for college graduates was the fifth-lowest in the country in 2014, and at least for the class of 2014, its average amount of $30,908 student debt per borrower occupies the same near-the-bottom spot in its respective category. Job growth is also projected to occur at a snail's pace, with just 2.3 percent growth projected between 2012 and 2022, and the statewide tuition and fees average, while the lowest in new England, was still steeper than 80 percent of states in the country.
Key data points for Maine:
- Median adjusted annual income for bachelor's degree graduates: $38,274
- Median adjusted income rank: No. 45
- Average amount of student debt per borrower: $30,908
- Average amount of student debt rank: No. 45
- Job growth rate rank: No. 49
Best and worst states
Compare key data points for all 50 states, and for a nice change of scenery, don't forget to check out more about the best states to live in if you're paying back student loans:
|Rank||State||Adjusted income for bachelor's degree holders, 2014||Average amount of debt for students who took out loans, class of 2014||Percent of graduates with student debt, class of 2014||3-year loan repayment rate for 4-year schools||Tuition & fees, 2014-15|
We ranked all 50 states on seven factors related to student debt and economic opportunity. For each data point, the states were scored on a 10-point scale, using the specified weights.
- Median annual income for bachelor's degree holders adjusted for cost of living, based on data from the American Community Survey and the Council for Community and Economic Research, 2014: 25%
- Unemployment rate, Bureau of Labor Statistics, December 2015: 10%
- Average amount of student debt owed by members of the class of 2014 who took out loans, The Institute for College Access & Success, 2015: 5%
- Percentage of the graduating class of 2014 with student debt, The Institute for College Access & Success, 2015: 10%
- Percentage of graduates who start paying off their student loans within 3 years, College Scorecard, 2013: 20%
- Average undergraduate tuition and fees for all four-year colleges in each state, National Center for Education Statistics, 2014: 15%
- The average growth rate for all jobs in a state, 2012-22, and the estimated number of annual job openings, 2012-22, relative to the state's estimated 2012 population, Projections Central, The Michigan Bureau of Labor Market Information and Strategic Initiatives, WorkForce West Virginia, and the U.S. Census Bureau, 2014
In the event of a tie, we used the adjusted income score as a tiebreaker, with the state that received the higher score in that category being ranked higher overall.
- Table B20004: Median Earnings in the Past 12 Months (in 2014 inflation-adjusted dollars) by sex by educational attainment for the population 25 years and over, American Community Survey 5-Year Estimates, 2014, Accessed Jan. 6, 2016, https://www.census.gov/acs/www/data/data-tables-and-tools/index.php
- Cost of Living Index: 2014 Annual Average Data, Council for Community and Economic Research, Accessed Jan. 6, 2016, https://www.coli.org/
- December 2015 unemployment rates for states, Bureau of Labor Statistics, Dec. 18, 2015, Accessed March. 6, 2016, http://www.bls.gov/web/laus/laumstrk.htm
- "Student Debt and the Class of 2014," The Project on Student Debt, The Institute for College Access & Success, October 2015, Accessed Jan. 6, 2015, http://ticas.org/sites/default/files/pub_files/classof2014.pdf
- "Student Debt and the Class of 2011," The Project on Student Debt, The Institute for College Access & Success, October 2012, Accessed Jan. 7, 2015, http://ticas.org/content/pub/student-debt-and-class-2011
- 2013 Merged Data, College Scorecard, U.S. Department of Education, Accessed Jan. 6, 2016, https://collegescorecard.ed.gov/data/
- Integrated Postsecondary Education Data System (IPEDS) 2014-15, National Center for Education Statistics, Accessed Jan. 6, 2016, http://nces.ed.gov/ipeds/
- Long Term Occupational Projections 2012-22, Projections Central, Accessed Feb. 9, 2016, http://projectionscentral.com/Projections/LongTerm
- Michigan Long Term Employment Projections, 2012-2022, Michigan Bureau of Labor Market Information and Strategic Initiatives, Accessed Feb. 9, 2016, http://milmi.org/?PAGEID=67&SUBID=177
- West Virginia Long Term Occupational Projections, 2012-2022, WorkForce West Virginia, Accessed Feb. 9, 2016, http://lmi.workforcewv.org/LTprojections/LTOccupationalProjections.html
- Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2012, U.S. Census Bureau, Accessed March 8, 2016, https://www.census.gov/popest/data/state/totals/2012/
- Unemployment rate, Labor Force Statistics from the Current Population Survey, Bureau of Labor Statistics, U.S. Department of Labor, accessed March 28, 2016, http://data.bls.gov/timeseries/LNS14000000
- Cost of Living Data Series, 2015 Annual Average, Missouri Economic Research and Information Center, accessed March 28, 2016, https://www.missourieconomy.org/indicators/cost_of_living/index.stm