California Students Grapple with Less Student Debt Than Most of US
A new analysis finds the Golden State ranks among the lowest in student loan burdens, with a high rate of public university enrollment contributing to the trend.
California students are graduating with significantly less student debt compared to their peers in most other U.S. states, according to a recent analysis by WalletHub. The state ranked 49th in student debt burden, placing it among the least indebted states, with only Hawaii and Utah faring better.
This trend is largely attributed to the high proportion of California students who choose to pursue higher education at public institutions. Approximately 83% of college-age students in the state attend one of the approximately 150 public colleges and universities across the University of California (UC), California State University (CSU), and California Community Colleges (CCC) systems. The relatively affordable in-state tuition at these public institutions means students are less likely to need substantial loans.
Data from the Public Policy Institute of California indicates that freshmen in California are 44% less likely to take out loans than students nationwide. Specifically, less than 40% of freshmen at UC and CSU schools borrow money, while the figure rises to about 50% for private nonprofit colleges and 70% for private for-profit institutions within the state.
Additionally, California's Cal Grants program provides financial aid that does not require repayment, further alleviating the debt burden for students.
On a national level, the study found that Mississippi carries the highest student loan debt, with debt exceeding 54% of the state's median income. Mississippi also faces challenges with the highest rate of student loan default and the third-worst job availability for recent graduates.
WalletHub's ranking was determined by analyzing various factors across states, including average student debt, unemployment rates for adults aged 25 to 34, and the percentage of borrowers with past-due loan balances. The study utilized data from sources such as the U.S. Census Bureau, the Bureau of Labor Statistics, and the Federal Reserve Bank of New York.