Top 12 Cities with the Most Student Loan Debt

Millennials are saddled with increasingly larger amounts of student loans, which reached a record high of $1.23 trillion in 2015, according to the Federal Reserve Bank of New York.

Author:: Ellen Chang
Publish date:: May 13, 2016 9:10 AM EDT

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Millennials are saddled with increasingly large amounts of student loans, which reached a record high of $1.23 trillion in 2015, according to the Federal Reserve Bank of New York.

Over 40% of students who took out over $200 billion in federal student loans either are delinquent or behind on their payments, according to the U.S. Department of Education. Gen Y-ers are allocating a larger portion of their salaries toward making their monthly payments with nearly a fifth of the paychecks winding up with student loan issuers, according to WalletHub, a Washington, D.C-based financial products website.

Analysts from WalletHub compared the average student loan balance to the median income from 2,513 U.S. cities to determine which ones have the most overleveraged borrowers. The study divided the average balance based on TransUnion's data from September 2015 by the median income of residents aged 25 to 44 in each of the cities.

Managing student loans starts with understanding the difference between federal and private loans, said Bruce McClary, spokesman for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization. The NFCC's recent survey found that 49% of consumers between 18 and 34 years old are confused about these two types of loans.

"Knowing the terms and conditions will help you identify the most cost effective methods of repayment," he said. "Borrowers seeking more information about their student loans can visit the Department of Education website."

Creating a budget and attempting to stick to it also helps consumers from defaulting on their loans.

"It can be challenging in cities where the cost of living is above the national average, but for every financial challenge there can be some great opportunities to save money," McClary said. "Sharing housing costs with others, walking or biking instead of driving and enjoying free or low cost recreation available at many urban parks are just some of the ways that Millennials can find room in their budget while starting their careers in most cities."

To find where those with student loan debt are most challenged, here are the top 12 cities where borrowers are the most overleveraged.

The average student loan balance in Voorhees is $46,423 with a median income of $26,711, and the ratio of student debt to median income of adults is 174%.

In Opa-locka, the average student loan balance is $28,352 with a median income of $16,669, and the ratio of student debt to median income of adults is 170%.

The average student loan balance is $42,507 in College Park with a median income of $25,329, and the ratio of student debt to median income of adults is 168%.

In Bastrop, the average student loan balance is $29,942 with a median income of $18,558, and the ratio of student debt to median income of adults is 161%.

The average student loan balance is $28,035 in Selma with a median income of $17,610, and the ratio of student debt to median income of adults is 159%.

In East St. Louis, the average student loan balance is $26,492 with a median income of $16,843, and the ratio of student debt to median income of adults is 157%.

The average student loan balance is $38,744 in Natchez with a median income of $25,428, and the ratio of student debt to median income of adults is 152%.

In Palatka, the average student loan balance is $28,426 with a median income of $19,130, and the ratio of student debt to median income of adults is 149%.

The average student loan balance is $29,634 in Darlington with a median income of $20,372, and the ratio of student debt to median income of adults is 159%.

In Loma Linda, the average student loan balance is $83,478 with a median income of $57,685, and the ratio of student debt to median income of adults is 145%.

The average student loan balance is $31,381 in Inman with a median income of $22,434, and the ratio of student debt to median income of adults is 140%.

In Greenwood, the average student loan balance is $35,945 in Selma with a median income of $25,930, and the ratio of student debt to median income of adults is 139%.

2. Opa-locka, Fla.

In Opa-locka, the average student loan balance is $28,352 with a median income of $16,669, and the ratio of student debt to median income of adults is 170%.