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Millions of Americans with federal student loans are facing another major change to their repayment plans as a key deadline approaches, while a new analysis shows wide differences in student debt and work opportunities across states.
A new WalletHub analysis ranks Mississippi as the state with the biggest student debt problem, followed by Delaware, Pennsylvania, South Carolina and West Virginia.
“College keeps getting progressively more expensive, and so does borrowing money to attend,” WalletHub analyst Chip Lupo said in the analysis. “Federal student loan interest rates recently hit a 12-year high and remain elevated."
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Difficulty finding jobs is one factor contributing to student borrowers' struggles in Mississippi, the analysis found. The state has the third-worst availability of jobs for students and the second-lowest share of paid internships.
Borrowers in Mississippi owe an average amount equivalent to more than 54 percent of the state's median income, the highest share in the country. Mississippi also has the nation's highest student loan default rate.
In Delaware, borrowers are also having trouble finding jobs and owe an average of nearly $40,000, the analysis found. That average is equivalent to more than 39 percent of Delaware's median income, while 60 percent of students have student loans.
Neither state has a student loan ombudsman law, which would provide a designated resource for borrowers seeking help with student loan complaints.
At the other end of WalletHub’s analysis, Utah ranked lowest for student debt, followed by Hawaii, California, Washington and New Mexico.
WalletHub compared all 50 states and the District of Columbia across two broad categories: student-loan indebtedness and grant and economic opportunities. The data was collected as of August 20, 2026, from sources including the U.S. Census Bureau, Bureau of Labor Statistics and the U.S. Department of Education.
Dina El-Mahdy, a professor of accounting at Morgan State University's Earl G. Graves School of Business and Management, said in the analysis that the effects of student debt can extend beyond borrowers' monthly payments and weigh on the broader economy.
“Required loan payments reduce borrowers’ disposable income, leaving them with less money to save, invest, purchase homes, start businesses, or spend on goods and services,” El-Mahdy said.
She added that large student loan balances can also affect borrowers' access to other forms of credit and delay major financial decisions.
“When combined with credit card debt, mortgages, and other financial obligations, student loan debt can delay major life decisions and limit broader economic activity,” she said.
What to Know About the Upcoming Deadline
Millions of federal student loan borrowers face a deadline less than two weeks away as they transition out of the Biden administration's Saving on a Valuable Education, or SAVE, plan.
Earlier this year, the Education Department directed the 7.5 million borrowers who were enrolled in SAVE to choose a new repayment plan. On July 1, loan servicers began sending borrowers notices giving them 90 days to make the switch. Borrowers who do not choose a new plan within that window can be automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan, according to the Education Department.
Each borrower's deadline is based on when their servicer sends the notice, meaning September 29 is the first deadline for borrowers—not a single cutoff for everyone. Borrowers who do not act could ultimately be moved into plans with significantly higher monthly payments than they had under SAVE, depending on their loan and repayment plan.
Roughly 1.5 million of the 7.5 million borrowers previously enrolled in SAVE had selected a new repayment option as of this week, the Department of Education told Newsweek for a similar article.
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Key Student Loan Deadline Is Approaching for 6 Million Borrowers
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Samantha Beech and Gray R. Thomas
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