WalletHub, the personal-finance website, has released its report on 2023’s States with the Most and Least Student Debt, ranking New York 33rd. Analyzing the 50 states and the District of Columbia, WalletHub used 12 key metrics, ranging from average student debt to unemployment rates among those aged 25 to 34, to determine the states friendliest towards student loan debtors.
New York’s student debt statistics show it ranking 16th in average student debt, 32nd in proportion of students with debt, and 38th in student debt as a percentage of income, adjusted for cost of living. Other factors assessed include the unemployment rate of the population aged 25 to 34 (7th), percentage of student loans past due or in default (14th), and availability of student jobs (17th) and paid internships (36th). The state ranked 4th in grant growth.
Nationwide, student debt is becoming a pressing issue, second only to mortgages in household debt. Total college-loan balances reached nearly $1.64 trillion at the end of Q1 2023, averaging over $37,000 per borrower. With 43.8 million borrowers, this figure highlights the growing financial burden on American students.
In response to the issue, Andrew Waldum, MBA, CFP®, Chair of Personal and Family Financial Planning at the University of Arizona, has shared strategies for students to minimize higher education debt. These include pursuing scholarships as a part-time job, obtaining part-time work, and considering community college for initial studies to reduce costs.
Waldum also emphasized the importance of pre-loan education rather than limiting borrowing amounts. He advocated for comprehensive classes on the loan process, interest rates, repayment periods, and how debt can affect future living standards. Such education would include examples of budgeting with student loan payments alongside other typical expenses.
Lastly, Waldum encouraged students and parents to thoughtfully consider the return on investment (ROI) of higher education spending. Recognizing the complexity of this topic, especially for those without financial education, he stressed the importance of tools and discussions that focus on sustainable repayment and the influence of student loans on future life milestones, such as buying a house or car, marriage, and relocation.
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