Kentucky Among Worst States for Student Debt in 2025

As student debt continues to weigh heavily on millions of Americans, now averaging over $39,000 per borrower, a new WalletHub report breaks down which states are doing the most (and least) to help residents manage the burden. Kentucky finds itself much closer to the top of that list than it might like.

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A Growing National Burden

Student debt is a massive and growing problem across the United States. Second only to mortgages, it’s the largest component of household debt for Americans, and it’s not slowing down. By the end of the first quarter of 2025, college-loan balances had surpassed $1.66 trillion, with more than 42 million borrowers carrying an average of over $39,000 each, according to the Department of Education. In comparison, some states have managed to ease the load, including Washington, New Mexico, California, Utah, and Hawaii, while others, like Kentucky, continue to rank among the most burdened.

How the Rankings Were Determined

To determine which states are easing the pressure on student-loan borrowers, and which are falling short, WalletHub evaluated all 50 states and the District of Columbia across many key metrics. These ranged from the average student debt load and availability of student-loan assistance programs to the unemployment rate among young adults and the percentage of borrowers behind on their payments.

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Where Kentucky Stands

Kentucky landed at No. 7 overall in WalletHub’s ranking, signaling that student debt remains a significant challenge across the state. While the average debt per borrower isn't among the worst nationally, ranked 29th, other factors pushed Kentucky higher on the list. A relatively high share of students carry debt (11th), and student loans eat up a large chunk of income when adjusted for cost of living (9th). Most striking is the state's top-ranked unemployment rate for young adults aged 25 to 34, a group that should be entering their prime earning years. Combine that with middle-of-the-pack scores for loan delinquency (22nd), student job availability (15th), and paid internships (10th), and it's clear that while Kentucky isn’t the most burdened state, it’s far from off the hook.

How Does Your State Rank?

Source: WalletHub

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Gallery Credit: Bethany Adams