Student loan debt just keeps creeping up, with seven out of ten students graduating with an average debt of $28,950 in 2014, according to The Institute for College Access and Success.
A good chunk of that debt just might depend on what state your college or university resides in, as geography does have a role to pay in the size of one's student loan burden.
That's the conclusion drawn by MoneySavingPro.com, which recently released a study of student loan debt by state. In general terms, schools in the Northeastern and Midwestern regions of the U.S. generate the most college loan debt. More specifically, Delaware has the highest student loan debt, at $34,000 on average per college student. Running close behind are New Hampshire and Pennsylvania, while Utah offers the lowest student loan debt rates in the U.S. (at about $20,000), followed by Nevada and California.
(Check out the full list here to see the student loan debt burden in your state)
Why are some states categorized as a higher student loan debt haven than others? According to MoneySavingsPro.com, the level of student debt varies widely according to region. "Students in the East and Midwest are borrowing amounts well above those in then West and South," the firm states in its report. "A variety of factors are at play in driving the difference in student debt by region, and by state."
"These differences are due to the cost of living and income demographics of each state, the financial aid packages available from the schools and the access to state loans and grants," the report continues. "Additionally, some states have a larger tax base to draw on for funds for higher education, along with a tradition of allocating funds for education."
Additionally, experts cite states where colleges routinely charge more for the collegiate experience.
"I think it's more accurate to say some states have a higher tuition cost which results in higher debt," notes Stanley Tan, CEO at OwlGuru.com, an online career and college education services site. "However, those states like Massachusetts or Delaware usually have a higher average salary to make up for the higher tuition cost."
Factor in, too, the average time it takes to pay off a student loan debt, Tan says. "You've got to consider the graduation rate and the average graduate salary for that college," he explains. "For example, College A might have $40,000 per year in tuition cost, but their graduation rate is 80% and their average graduate salary is $80,000. College B might have $10,000 per year in tuition cost, but their graduation rate is 30% and their average graduate salary is $30,000."
Optics counts for a lot, too. "There's definitely a perceived idea that some schools are better than others in individual states," offers Amanda Abella, a finance specialist at MoneySavingsPro.com. "The Northeast, for example, is full of Ivy League schools and Midwestern schools, like the University of Chicago, often get listed as some of the best schools in the country."
The way various states fund public universities has to factor in costs and student loan debt, college financing experts.
"Every state funds their schools in different ways," explains Elisia Howard, a certified financial aid advisor at College Insight in Seattle. "Some states, for example, fund their educational institutions greatly, while other states, especially during the recession, cut their educational spending."
Howard says the U.S. East Coast is notorious for high educational costs, partly because of their state funding for public institutions and partly because of the large number of private schools. "Without proper funding of educational institutions and with the rising costs universities are imposing, it creates a perfect storm of high educational costs," Howard adds. "Without the knowledge of how to navigate these issues, students often believe their only option is to take out loans."
Of course, there are steps to take beforehand to mitigate any student loan debt.
"One of the best ways students and families can avoid heavy student loan debts is to start saving early to pay for college, if possible," says Bob Collins, vice president of financial aid at Western Governors University, a nonprofit, online university based in Salt Lake City. "One of the smartest ways to save is through a 529 Savings account, or any tax-advantaged savings vehicle. For example, the Utah Educational Savings Plan is one of the best portfolios in the country."
That's good advice no matter which state you attend college.