How student loan debt is crippling the newest generation of the work force (or why you should learn to love California and stay out of Vermont)

June 25, 2013

Most young people go into college expecting to come out with a heap of debt. It wasn’t always this way, but you’d have a hard time finding someone who graduated in the last five years that didn’t come into the professional world with a giant ball and chain from student loan debt. In fact, 66% of students who graduated in 2011 owe the government money. Most people – say, future dentists – use their career path as an excuse. “It’s expensive now, but I’ll be able to pay it back when I get out,” seems to be the thought, but with the potential for interest rates on federally subsidized Stafford loans to double – from 3.4% up to 6.8% – students could start to pay much, much more in an effort to complete their degree – and that doesn’t even include dental school!

With the average student graduating college with $27,000 in student loans, there’s not much to be done, except to avoid these ten states, the worst in America for recent graduates (according to debt to earnings ratios).

Some final thoughts about the fairness of pay raises awarded to dental hygienists
Time for the annual DAD salary survey!

10. Pennsylvania
Seventy percent of Pennsylvania graduates have student loan debt, averaging up to $31,581. As professionals, they earn an average of $43,869. The ratio of debt to annualized earnings is 70%.
9. Michigan
Michigan students come out of college with an average of $28,021 in debt. New professionals earn an average of $39,737, putting the debt-to-earnings ratio at 71%.
8. Rhode Island
The average debt of a Rhode Island graduate is $29,701 for college loans. For those with a job, the average annual salary is $41,761 – meaning the debt-to-earnings ratio is tied with Michigan at 71%.
7. Indiana
It gets worse for the hoosiers. Average student loan debt is $28,071, which means that their average salary of $38,867 puts the ratio at 72%. Is it getting hot in here, Indiana?
6. Maine
Although Maine students have less money borrowed - $26,587, on average – they’re also making less annually. The $35,736 average that they take home puts the ratio at 74%. Ouch.
5. Montana
And the pattern continues: as the amount borrowed decreases, so does the annual salary. With $24,614 owed on average, new professionals earn $33,258 – putting their ratio at 74%, just like Maine.
4. Ohio
$29,278 borrowed, $39,031 earned (on average). A full 75% debt-to-earnings ratio for those new professionals in Ohio.
3. New Hampshire
New Hampshire graduates owe $33,113 for their education and bring in a bit more for their annual salary. At $43,753 annually, the ratio is at a whopping 76%.
2. Iowa
Tied with New Hampshire for a 76% ratio, Iowa graduates owe $29,350 on average and rake in $38,828.
1. Vermont
These poor guys. While recent graduates only (only?) owe $28,860 in student loans, they don’t quite make $10K more a year. The average salary is $35,074, putting the ratio at 82%.

And if you’re wondering, the best case study-work scenario is to live in California, of all places. The average cost of student loans is only $19,271, while new graduates earn an average of $53,766. That’s not much by California’s standards – but it’s much more than the average amount owed, so… win?

If you’re wondering where to live now, check out these articles (but ignore that Pennsylvania and Ohio are some of the best states to live in if you’re a young professional – that’s only if you don’t have student loan debt):

The 12 best states for young dental hygienists
The 12 best states for young dental assistants

Lauren Burns is the editor of Proofs magazine and the email newsletters RDH Graduate and Proofs. She is currently based out of New York City. Follow her on Twitter: @ellekeid.