Special Report

Ten States With the Most Student Debt

7. Maine
> Class of 2012 average debt: $29,352
> Class of 2012 pct. with debt: 67% (9th highest)
> Median earnings with bachelor’s degree: $40,466 (5th lowest)
> Avg. total debt: $75,403 (9th highest)

Students graduating from schools in Maine may have a hard time repaying their loans if they remain in the state. Median income among state residents with a bachelor’s degree was just $40,466 as of 2012, the fifth lowest figure in the country that year. A double-digit unemployment rate among residents ages 20 to 24, coupled with weak job growth of 0.9% during the 12 months preceding April, may also make it challenging for residents to pay off their loans. Maine residents hardly limited their borrowing to student debt. Maine’s consumer debt per capita was ninth highest of any state, and it included the eight highest levels of both credit card and mortgage debts, according to Credit Karma figures.

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6. Iowa
> Class of 2012 average debt: $29,456
> Class of 2012 pct. with debt: 71% (3rd highest)
> Median earnings with bachelor’s degree: $44,862 (25th lowest)
> Avg. total debt: $52,601 (11th lowest)

Some 71% of graduates from Iowa schools in 2012 had student loans, a higher rate than in all but two other states. In addition, indebted Iowa students had one of the highest debt burdens in the country. Still, the average student debt rose by just 22% between 2004 and 2012, less than in most other states. Iowa had relatively low unemployment in each of the last two years and one of the nation’s lowest underemployment rates, at 9.2%. Despite the slower debt growth and the relatively strong job market, many residents struggled to pay off their loans. More than 12% of borrowers who entered into repayment in fiscal 2011 defaulted within two years, one of the highest rates in the nation.

5. Rhode Island
> Class of 2012 average debt: $31,156
> Class of 2012 pct. with debt: 69% (tied-6th highest)
> Median earnings with bachelor’s degree: $52,221 (8th highest)
> Avg. total debt: $65,161 (19th highest)

Four-year graduates from schools in Rhode Island had some of the higher earnings prospects in the country. A typical Rhode Island resident with a bachelor’s degree earned more than $52,000 in 2012. This may have made college students more willing to take on debt, as roughly 69% of 2012 graduates from the state’s schools took out loans. Not only are more students taking on debt, but between 2004 and 2012 average debt burdens increased 60%. If graduates decide to remain in Rhode Island, they may find it more difficult to pay their debt given that the state’s unemployment rate for recent college graduates was 21.5%, the highest rate in the country.

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