2025’s Worst States for Student Loan Debt (And How to Get Relief)

The student loan crisis in America is heating up again—and Southern states are feeling the most pressure.

As federal protections fade away, millions of borrowers are falling behind, with delinquency rates now skyrocketing across the country.
 

Student Loan Delinquencies Surge in the South

According to the latest data from the Federal Reserve Bank of New York, seven Southern states now top the national rankings for student loan delinquency.

In each of these states, more than 30% of borrowers are 90+ days past due on their student loans.

Here are the top three states with the highest delinquency rates:

• Mississippi – Nearly 45% of borrowers have delinquent loans (the highest in the country)

• Alabama – 34.1% delinquent

• West Virginia – 34% delinquent

These figures highlight growing economic inequality and signal a deeper crisis brewing in regions already hit hard by inflation, job instability, and reduced access to financial education.

There are several student loan assistance programs available in Southern states, despite recent federal policy changes.

While some federal programs have been scaled back, state-level initiatives continue to provide relief for borrowers.

 

State-Specific Forgiveness Programs in the South

Many Southern states offer their own student loan forgiveness programs, often targeting specific professions or underserved areas. For example:

• Georgia: The HOPE Scholarship program provides financial assistance to students pursuing higher education in Georgia. 

• Texas: Offers loan repayment assistance programs for teachers, nurses, and other public service professionals working in designated shortage areas.

• Louisiana: Provides loan forgiveness for health professionals who commit to working in rural or underserved communities.

These programs often require a commitment to work in specific fields or locations for a set period.

It's advisable to check with your state's higher education agency for detailed eligibility criteria and application procedures.
 

Federal Assistance Programs Still Available

Despite changes at the federal level, some programs remain accessible:

• Public Service Loan Forgiveness (PSLF): Available to borrowers working full-time in government or non-profit organizations. After making 120 qualifying payments under a qualifying repayment plan, the remaining loan balance may be forgiven.

• Income-Driven Repayment (IDR) Plans: These plans adjust your monthly payment based on income and family size, with potential forgiveness after 20-25 years of qualifying payments.

• Borrower Defense to Repayment: If you believe you were misled by your educational institution, you might be eligible for loan forgiveness under this program.

 

Why Are Delinquency Rates Rising?

One major reason? The end of federal borrower protections.

In 2023, the Department of Education offered a temporary “on-ramp” program, allowing borrowers to resume payments without immediate credit consequences.

But now that this shield has expired, delinquent accounts are once again being reported to credit agencies—and many borrowers weren’t even aware that their repayment obligations had resumed.

 

The Financial Fallout of Missed Payments

Falling behind on student loan payments can damage more than just your credit score. Delinquencies can lead to:

• Higher interest rates on future loans and credit cards

• Rejection for mortgages or car loans

• Limited access to financial products and housing

And the consequences are intensifying. Starting this summer, the federal government will regain the power to garnish wages from borrowers who remain in default—taking money directly from paychecks to recover unpaid student loans.

If you’re unsure about what assistance you qualify for, take a look here.

 

Relief Programs Are Still in Limbo

While President Biden has introduced new initiatives like the SAVE repayment plan and targeted student debt cancellation, many federal relief efforts have expired or stalled in Congress.

For borrowers in low-income states—especially in the South—the lack of legislative progress has left them vulnerable.

The Department of Education reports that 1 in 5 borrowers nationwide is currently over 90 days past due on at least one student loan.

 

What Can Borrowers Do Now?

If you’re behind—or unsure about your loan status—here’s how to protect yourself:

• Log in to your loan servicer’s portal and check your repayment status

• Explore income-driven repayment plans like SAVE to lower your monthly payments

• Enroll in auto-pay to avoid missing future due dates

• Watch for updates on federal loan forgiveness and support measures

Bottom Line: Student loan delinquencies are rising fast, and the fallout could impact millions of Americans—especially in the South.

Stay proactive, informed, and explore your repayment options to avoid long-term financial consequences.

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