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New Study Finds Washington, DC Leads Nation in Student Loan Debt

New Study Finds Washington, DC Leads Nation in Student Loan Debt

“North Dakota had the lowest average balance”

For some reason, this is not surprising at all.

Advisor Smith reports:

States With the Highest Student Loan Debt

Many Americans believe that higher education is the key to a positive economic future. However, the United States has some of the most expensive costs for college and universities in the world. To bridge this gap, many Americans take advantage of student loans that are offered or guaranteed by the federal government. While these loans are an important way for students to finance their education, they can be an ongoing burden for graduates after they have completed their studies.

In this study, AdvisorSmith examines the states with the highest levels of student loan debt. In particular, we took a deeper look into which states had the highest average student loan balances. Additionally, we also examined the states where the highest percentage of the population currently carries a federal student loan.

At the end of 2020, the average student loan debt held in the federal student loan portfolio was $36,510. There were a total of 42.9 million borrowers, which is approximately 13% of the total U.S. population.

States With the Highest Student Loan Balances

Below, we rank the states with the highest average student loan balances. The nation’s capital, Washington, D.C., had the highest average balance of $54,982.82, while North Dakota had the lowest average balance at $28,402.37.

Rank State Average Loan Balance
1 Washington, D.C. $54,982.82
2 Maryland $42,592.37
3 Georgia $41,255.89
4 Virginia $38,903.12
5 Florida $38,160.04


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Most states subsidize their public colleges with annual appropriations of tax payer funds. Some states also fund financial aid programs as well as offer lower “in state? tuition levels. DC does not do that. If anything, DC funds its high school graduates to attend schools in other states.

The second factor is that many people move to DC to take public interest jobs that are low-paying. So, these people would be slow in paying off their student loans.

With both factors, it is not surprising that DC has the highest average student loan debt. I would speculate that if the researchers could aggregate the data on a city level, one would predict that college towns would have higher debt levels that non-college towns. This is because people attending graduate and professional schools defer the pay-down of their student loans. In a sense universities are a magnet that draw debt-laden students. A good study would compare DC with cities of a comparable population, to measure how they rank in average student loan debt. Similarly, it would be interesting to compare a state capital city such as Columbia SC, that has the U of SC, with the student loan debt of Washington, DC.