Student loans can be stressful. Two-thirds of borrowers report physical symptoms of stress related to their student debt, including sleep loss, headaches, and muscle tension, according to our recent student debt stress survey.
The burden of student debt isn’t universally severe, however. Where college graduates attend school, live, and work can have a big impact on their student debt affordability.
Our annual student loan affordability study compares average student loan balances to costs of living and wages in each state to determine the best states to live in for student loan borrowers looking to repay their debt.
The differences between states when it comes to student loan affordability are stark. In the best-ranked state of Utah, student loans are 2.2 times more affordable than in the worst-ranked state of Hawaii.
How we ranked states by student loan affordability
To identify the best states to live in if you have student debt, we surveyed three key factors:
- Average student loan balances for 2016 graduates in each state
- Average annual wages for workers in each state
- The cost of living in each state compared to the national average
Based on these factors, we calculated an average borrower’s monthly disposable income, which we used to determine the following rankings. This disposable income was the amount left over after covering basic expenses such as food, shelter, transportation, and health care.
We then compared monthly disposable incomes to monthly student loan payments for a standard 10-year repayment plan. We considered student loan payments to be affordable when they equaled 10% of a typical worker’s disposable income — modeled on the formulae used to set monthly payments on income-driven repayment plans for federal student loans.
Only one state met this test: Utah, where student loan payments account for 10.01% of monthly disposable income. A borrower living in Hawaii, by comparison, can expect to put 22.17% of their monthly disposable income toward student debt.
Student loans are more affordable for the 2016 class
Overall, student loans are becoming more affordable thanks to lower balances, rising incomes, and a dip in the costs of basic living expenses.
At the national level, here’s what the average student loan borrower is up against:
- Disposable income devoted to student loan payments: 14.57%
- Average student loan balance: $27,822
- Average annual wage: $49,630
Today, student loan payments eat up less disposable cash compared to the previous year. The 14.57% average is a significant drop from our 2016 student loan affordability survey average of 17.3%.
The average student loan balance estimates for this study are based on borrowing statistics from Peterson’s data and might differ from other projections. For example, a different estimate of student loan debt puts the average 2016 graduate’s balance at $37,721.
10 best states to live in if you have student debt
Residents of the following states use a small portion of their disposable incomes — 13.50% or less — to cover student loan payments.
Here are the best states to live in if you’re looking to keep up with student loan payments. We’ve also included the city in each state where workers earn the highest wages based on available data.
- Disposable income devoted to student loan payments: 13.46%
- Average student loan balance: $25,378
- Average annual wage: $46,840
- City with highest average wage: unavailable
Wyoming made it into the top 10 this year but fell from its previous spot in the top three, mostly because of a significant uptick in student borrowing. 2016 college graduates in Wyoming left with $2,695 more in student debt compared to last year’s study.
But Wyoming graduates still have a relatively small amount of student debt. The state’s residents also enjoy comparatively high wages and low living costs.
- Disposable income devoted to student loan payments: 13.35%
- Average student loan balance: $27,865
- Average annual wage: $53,090
- City with highest average wage: Charlottesville, $50,950
At No. 9 is Virginia, a state where student borrowing is about on par with the national average.
However, it pulls ahead thanks to stellar incomes and reasonable living costs. Virginia residents have some of the highest disposable incomes — $2,113 per month — making it easier to afford student loan repayment.
- Disposable income devoted to student loan payments: 13.28%
- Average student loan balance: $25,311
- Average annual wage: $44,170
- City with highest average wage: Omaha, $46,490
Then there are states like Nebraska, where student loan borrowers benefit from low living costs but can’t necessarily count on higher incomes. The average annual wage is $5,460 below the national average.
But the state makes up for it with some of the lowest living costs in the nation. It’s worth noting that student loan balances are $924 higher than the previous year, though.
- Disposable income devoted to student loan payments: 13.28%
- Average student loan balance: $26,498
- Average annual wage: $46,540
- City with highest average wage: Atlanta, $50,720
On average, Georgia’s 2016 graduates borrowed $1,256 less than the previous year’s class, lowering monthly costs from $281 to $268 in 2016 and boosting Georgia to No. 7 this year.
- Disposable income devoted to student loan payments: 13.17%
- Average student loan balance: $23,384
- Average annual wage: $39,590
- City with highest average wage: Fayetteville, $44,980
In Arkansas, average annual wages are low — a full $10,040 less than the national average.
But this state jumped from the middle of the pack into the top 10 thanks to some of the lowest levels of student debt. Educational loan balances fell a drastic $2,698 from the previous year’s average student debt of $26,082.
So, along with having the third-lowest costs of living in the nation, Arkansas college graduates are among the most likely to keep up with student loan payments.
- Disposable income devoted to student loan payments: 12.99%
- Average student loan balance: $26,230
- Average annual wage: $47,770
- City with highest average wage: Houston, $52,870
Everything’s bigger in Texas — except costs of living and student debt. Both are below average and decreased year over year. 2016 college graduates in Texas will have to devote just 13% of their disposable incomes to student loans — compared to the 15% the previous year’s class paid.
And don’t forget Texas’ lack of a state income tax. Although it didn’t factor into these rankings, living in a state with no income tax is a significant boost to student loan borrowers’ bottom lines. Residents of states with no income tax save an average of $1,977 per year.
- Disposable income devoted to student loan payments: 12.99%
- Average student loan balance: $26,607
- Average annual wage: $52,710
- City with highest average wage: Boulder, $60,390
Although Colorado has higher costs of living, it also has above-average wages. Higher pay ensures Colorado’s 2016 graduates are more likely to have enough cash to comfortably cover student loan payments each month.
3. North Carolina
- Disposable income devoted to student loan payments: 12.46%
- Average student loan balance: $24,133
- Average annual wage: $45,280
- City with highest average wage: Durham, $57,850
North Carolina jumped from No. 10 last year to No. 3 this year thanks to improvements across all factors that influenced these rankings.
Graduates in the 2016 class borrowed a whopping $1,512 less than last year’s graduates. Plus, annual wages increased by $1,110 from 2015, and costs of living fell slightly.
- Disposable income devoted to student loan payments: 12.16%
- Average student loan balance: $24,331
- Average annual wage: $55,810
- City with highest average wage: Seattle, $63,300
Next is Washington, which moved up from its spot as the fourth-best state to live in for student loan affordability last year. It boasts one of the highest average incomes of any state — $6,180 above the national average.
With one of the lowest average student debt balances among 2016 graduates, Washington residents should find it easier to keep up with payments. Plus, like Texas, Washington doesn’t levy a state income tax.
- Disposable income devoted to student loan payments: 10.01%
- Average student loan balance: $18,969
- Average annual wage: $45,490
- City with highest average wage: Salt Lake City, $48,850
Holding on to its No. 1 spot is Utah, the only state where 2016 graduates borrowed less than $20,000 on average. It beats out the next-lowest student loan balance by a decent margin — $2,311.
Relatively low student debt and costs of living combine to put Utah at the top of the best states to live in if you have student debt. College graduates here can more easily keep up with payments, which are just 10% of a typical Utah worker’s disposable income.
Full rankings: Student loan affordability by state
Here are the full rankings of student loan affordability for all 50 states and the District of Columbia. States are ordered from best to worst.
|Rank||State||Disposable income devoted to student loan payments||Average annual wage||Average student loan balance||Monthly student loan payment||City with highest wages||City’s average wage|
|1||Utah||10.01%||$45,490||$18,969||$192||Salt Lake City||$48,850|
|17||New York||14.48%||$58,910||$21,280||$215||New York City||$63,320|
|41||District of Columbia||17.68%||$82,950||$33,650||$341||—||—|
|44||South Dakota||18.51%||$40,070||$30,090||$305||Sioux Falls||$43,180|
This study compared average earnings in each state and the District of Columbia to costs of living and average student loan balances to find the states where student loan repayment is most affordable.
Average student loan balances in each state were calculated from Peterson’s data on indebtedness averages at four-year colleges. Colleges were excluded that did not report a dollar average for the average indebtedness number or if the figure was for a year before 2015.
Disposable income of an average worker in each state was calculated based on the following factors:
- The Bureau of Labor Statistics’ reported 2016 mean wage in the state, released in March 2017
- LESS basic living expenses, including housing, transportation, food, and health care, based on national Consumer Expenditure data for 2016 and adjusted for local costs of living, sourced from the Council for Community and Economic Research’s Cost of Living Index
Disposable income was then compared to typical payments on the average student debt balance of a 2016 graduate in each state based on the following criteria:
- Each state’s average student loan debt was amortized over a standard 10-year repayment period, assuming an interest rate of 4.00%.
- The average payment was compared to disposable income to find the portion of disposable income need to cover these basic payments.
The study was modeled on federal standards for student loan affordability. Income-driven repayment plans set affordable student loan monthly payments at 10% of monthly discretionary income. However, our methodologies differ and might not be reflective of results using income-driven repayment plan formulae.
Maximize your student loan savings
So, you’ve saved all of this money by living in a cheaper state. But how do you get the most bang for your buck? Here are five things you can do to pay down your debt faster.
1. Make more than the minimum payment
If you have a few extra dollars in your pocket, put more money toward student loan payments. That extra cash will go directly to your principal balance, meaning you’ll pay less in interest over time and lower your overall debt.
2. Target high-interest debt first
Be strategic with how you spend your new savings. You could use the debt avalanche method, for example, to erase your debt with the highest interest rate first. Following this rule of thumb will help to decrease the amount you pay in interest overall.
3. Refinance your student loans
Refinancing your student loans is a great way to pay off your debt faster. You’ll consolidate multiple student loans into one with a lower interest rate. By doing this, more of your money will go toward paying down your principle balance.
4. Pay your loans every two weeks
To pay down your student loans faster, make a payment every two weeks instead of once per month. To do this, you’ll split your normal monthly payment into two. Oddly enough, following this strategy means you’ll make an extra payment by the end of the year.
5. Live frugally
No matter where you live, you can increase how much money you have left over at the end of the month. Create a budget that can help you lower unnecessary costs, such as money you spend eating out. Then, put those savings toward your student loan debt.
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 8.70%1||Undergrad & Graduate|
|1.74% – 7.99%2||Undergrad & Graduate|
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|1.89% – 5.90%4||Undergrad & Graduate|
|1.74% – 7.99%5||Undergrad & Graduate|
|2.05% – 5.25%6||Undergrad & Graduate|
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|N/A7||Undergrad & Graduate|
|1.99% – 8.38%8||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for Navient.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
7 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
8 Important Disclosures for CitizensBank.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.