This Is the Worst U.S. State for Student Debt

Student debt is a problem, and it keeps getting worse. This year, U.S. borrowers owe more than $1.4 trillion for federal loans—that’s more than twice as much as was owed a decade ago.

When it comes to preparing for that debt, students put a lot of thought into where they’ll go for school. But geography doesn’t stop mattering after graduation. Degree-holders fare significantly worse in some states than in others when it comes to student debt. After all, location can affect salary, cost of living, job opportunities, and more. Find out where student loan money really goes.

WalletHub took a deep dive into the best and worst places for college grads who owe money, comparing factors such as unemployment rate and average student debt. Among all 50 states and D.C., the analysis pinpointed the worst state for student debt as South Dakota, where the average borrower owes $28,810 in federal loans.

That might seem like pocket change compared to other states—the average borrower in D.C. owes $51,191, and Californians owe $123.1 billion in federal student loans, compared to South Dakota’s $3.1 billion—until you take population into account. One of the main reasons behind South Dakota’s bad ranking is its high proportion of students in debt, second to West Virginia nationwide. The Mount Rushmore State also has one of the highest proportions of borrowers aged 50 and up who still owe money for school.

Filling in the other worst five states for student debt in WalletHub’s analysis were West Virginia, Pennsylvania, New Hampshire, and Ohio. Make sure you know these 15 money management tips every recent grad should use.

Meanwhile, Utah landed a solid spot as the best state for student debt. Not only does it have the country’s lowest proportion of students with debt, but those who do owe money have the lowest debts nationwide, on average. Other student debt-friendly states included Hawaii, Wyoming, California, and Washington.

Fred Selinger, a business lecturer at the University of California, Berkeley, suggests limiting loans based on your expected salary. “I recommend the amount of your student debt should not exceed what you estimate your first year’s compensation will be after graduation,” he tells WalletHub. The state where you hope to move just might be a factor in that. Learn how you can pay off student loans in less than five years.