Americans have never owed as much in student loans as they do today, with borrowers collectively shouldering a burden of $1.5 trillion last year. Amid all this debt, it’s unfortunate but not surprising that millions of Americans miss payments on their loans.
Delinquency on student loan payments can lead to default, causing long-term damage to credit scores and even lead to wage garnishment. While federal student loans generally allow 270 days of delinquency before default occurs, some private loans can enter default after just one missed payment.
Although the student loan crisis is a national one, Student Loan Hero wanted to see if borrowers in some geographic areas are struggling to repay their loans more than those in others. To find out, we took a close look across the 100 largest metros to see what proportion of student loan borrowers were more than 90 days delinquent on their debt — and the results were striking.
Here’s what we found.
Where borrowers are delinquent on their student loans
- Nearly 26% of student loan borrowers in Jackson, Miss., have been delinquent on their loan repayment, taking the top spot on our list.
- Two metro areas in Florida — Lakeland-Winter Haven and Daytona Beach — follow with the next-highest delinquency rates of 23.4% and 23.3%, respectively.
- At the other end of the spectrum, just under 13% of borrowers in Provo, Utah, have fallen into delinquency.
- San Jose, Calif., and Madison, Wis., have the next-lowest delinquency rates, at 14.1% and 14.4%, respectively.
- Southern borrowers are far and away more likely to fall into student loan delinquency. A full 14 of the 15 metros at the top of the delinquency list lie below the Mason-Dixon line, and not one Southern metro made it onto the list of 25 metros with the lowest rates of delinquency.
- Borrowers in the bottom metro of our list are half as likely to be have a delinquency than borrowers in the top — an extreme difference.
5 places where borrowers fall behind on student loan payments
1. Jackson, Miss.
Rate of delinquency: 25.6%
Among the top 100 metros in the U.S., Jackson, Miss., came in first for the highest rate of student loan delinquency, with more than 1 in 4 borrowers falling behind on their payments.
Part of the problem may be that Mississippi has a slightly lower graduation rate for college students, with 51.7% getting a bachelor’s degree after six years versus a national average of 53.8%, according to 2015 data from the National Center for Education Statistics.
Not having a college degree can limit earning potential, making it harder to repay student loan debt. If borrowers in these areas didn’t earn the degree for which they took out student loans, they could end up saddled with debt but without the means to pay it back on time.
2. Winter Haven, Fla.
Rate of delinquency: 23.4%
Winter Haven, Fla. came in second on our list, with nearly one out of four borrowers having gone delinquent on their student debt at some point during repayment.
Florida’s graduation rate for bachelor’s candidates is lower than Mississippi’s, at 48.5%, and only 12.3% of Winter Haven residents aged 25 or older have at least a four-year degree, below the national average of 19.7%.
3. Daytona Beach, Fla.
Rate of delinquency: 23.3%
Daytona Beach nearly tied with Winter Haven for rates of student loan delinquency, with its rate only 0.1 percentage point lower.
Rates of educational attainment among Daytona Beach residents were slightly lower than among those in Winter Haven, and among 18- to 24-year-olds, only 5.7% had a bachelor’s degree — about half that of the national figure of 10.5% for that same age group.
4. Memphis, Tenn.
Rate of delinquency: 23.2%
Coming in fourth in our list of places with the highest rates of student loan delinquency is another Southern city — Memphis, Tenn. Its nickname of Home of the Blues might refer to music, but it could also apply to its resident student loan borrowers, with nearly one-quarter of them struggling to keep up with payments.
In terms of graduation rates, Tennessee is also below the national average, with 50.4% finishing college in six years or less.
5. Toledo, Ohio
Rate of delinquency: 22.8%
Although our study revealed that borrowers in the South tend to face the highest rates of delinquency, the northern city of Toledo, Ohio, is an exception to the geographical rule.
With 22.8% of student loan borrowers falling behind on payments, Toledo has some of the highest rates of delinquency in the U.S. This is despite the fact that Ohio’s college graduation rate matches the national average.
Looking more closely at the city, however, we also found that Toledo’s unemployment rate is higher than average: 5.7% as compared with the national rate of 4.0%. Along with educational attainment, employment opportunities could be another factor that affects delinquency rates within a given metro.
5 areas with the lowest rates of student loan delinquency
1. Provo, Utah
Rate of delinquency: 12.8%
While student loan borrowers in Jackson, Miss., had the highest rates of student loan delinquency, residents of Provo, Utah had the lowest, with a rate exactly half that of their Jackson counterparts.
Surprisingly, Utah’s graduation rate is a relatively low 46.7%, less than Florida’s. But on the other hand, educational attainment is above the national average: Among those 25 and older, 28.5% have a bachelor’s degree, compared with 19.1% for the country as a whole.
2. San Jose, Calif.
Rate of delinquency: 14.1%
San Jose had the second-lowest rates of delinquency in the country, less than 2 percentage points behind Provo. The strong showing comes within the context of California’s 66.3% six-year graduation rate for bachelor’s degree programs, putting in at No. 6 in the nation.
This metro area’s success with student loan repayment might also have something to do with its overall wealth. According to a 2018 study by 24/7 Wall Street, the San Jose metro area topped the list of wealthiest urban areas in the U.S., with a median household income of $110,040 and a hefty 22.8% of households earning $200,000 or more.
3. Madison, Wis.
Rate of delinquency: 14.4%
Student loan borrowers in Madison, Wis. are generally able to keep up with their student loan payments, with a delinquency rate of 14.4%. Home to University of Wisconsin, Madison, a school with more than 44,000 students, Madison has a population with relatively high rates of educational attainment. Within the metro area, 27.1% of those who are 25 and older graduated with their bachelor’s.
4. Harrisburg, Pa.
Rate of delinquency: 15.3%
Fewer than 1 out of 6 borrowers in Harrisburg, Pa. have fallen behind on their student loan payments.
Perhaps the city’s relatively low cost of living — 8% below the national average, according to Forbes — helps student loan borrowers save enough money each month to keep up with their student loan bills. Likewise, Pennsylvania ranks just behind California in college graduation rates, at 65.9%.
5. Oxnard, Calif.
Rate of delinquency: 15.9%
Oxnard, Calif. rounds out the list of metro areas with the lowest rates of delinquency among student loan borrowers. This southern Californian city also made the list of wealthiest areas in the U.S., coming in at No. 8 on 24/7 Wall Street’s list.
Among its residents, the median household income is $80,135, and 11.4% of households earn $200,000 or more. Oxnard adults aged 25 and over earn their bachelor’s at a rate of 21.9%, and 11.6% have a graduate degree or higher.
Rates of student loan delinquency: How the top U.S. metros compare
How to keep up with your student loan payments
Keeping up with student loan payments can be a big challenge, especially if you’re a recent graduate or are struggling to find a job. But falling into delinquency can cause even more problems, especially if your loan goes into default.
To avoid harming your finances, consider taking one or more of these steps with your student loans:
- Change your student loan repayment plan. If your bills are too high, find out if you can switch repayment plans. Federal student loans, for instance, are eligible for income-driven plans, which adjust your monthly payment along with your income. If you still have a balance after 20 or 25 years, it could even be forgiven. Although private student loans aren’t eligible, you can speak with your lender about your options. Lowering your bills might be the solution you need to avoid delinquency.
- Find ways to decrease your spending or boost your income. Once you’ve checked in with your student loan repayment plan, it’s time to take a close look at your budget. Figure out if there are areas where you can lower your monthly expenses. At the same time, look for opportunities to earn more, whether through switching jobs or starting a side hustle, such as driving for Uber or working for TaskRabbit.
- Refinance your student loans for new terms. Through refinancing, you can choose new repayment terms, often between five and 20 years. Going with a longer term could reduce your monthly bills, taking some of the pressure off your wallet. You might also qualify for lower interest rates than you have now, thereby saving hundreds or even thousands of dollars. The main downside is that refinancing federal student loans turns them private, meaning you lose access to federal plans and programs, so make sure you understand what you’d be giving up before you refinance with a private lender.
Even though student loans can be stressful, ignoring them will only make a tough situation worse. Instead, look for ways to adjust them into a more reasonable range. And if you start making more money, consider throwing extra payments at your loans to pay them off even faster.
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|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.26% – 13.26%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.62% – 11.47%*,4||Undergraduate and Graduate|
|4.38% – 13.38%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.47% – 12.34%8||Undergraduate, Graduate, and Parents|