Study shows South Dakota has most student debt, experts say budget and save money

SIOUX FALLS, S.D. (KSFY) - A new study finds South Dakota has the highest rate of student loan debt in the country. That study from consumer finance website wallethub.com considered 12 different factors.

South Dakota has the highest proportion of students with debt, and is 4th highest when it comes to percentage of student loan borrowers over age 50.

This is the second year in a row South Dakota is at the top of this list and South Dakota’s neighbors aren't far behind with Iowa 5th and Minnesota 6th.

Some say the reason students are struggling with loan debt is that they are borrowing money they may not actually need.

Augustana University in Sioux Falls has a 98 percent placement rate for its graduating students. Vice President of Admissions, Nancy Davidson said that one fact proves college is a solid investment.

"Anytime that you're borrowing money you want to make sure that you're going to get a return and we've proven time and time again that are students are getting the return on that investment," Davidson said.

But often time’s students choose a job that doesn't fit the lifestyle they want to live. That’s when the question of doing what you love versus working just for the money comes into play.

"I think if you're passionate about what you're doing you're going to be more successful," Davidson said.

Budgeting and taking out the right amount of money is key as well and this could be a reason why South Dakota sees some of the most student debt.

"I mean budgeting is an important aspect of life whether you’re a high school student, a college student or a young professional or an older adult," Davidson said.

"Are we working on saving money?” Breck Miller with Lutheran Social Services said. “South Dakota has a lower cost of living but also sometimes with that can come with lower average income which means we have less money that can go into paying for our education."

Miller said it's possible for students to work more during college to pay off their debts faster.

He said while a student's social life may suffer it's a temporary inconvenience.

"Students have access to borrowing more than they necessarily need and again when you're young you’re not necessarily thinking about the repayment later on down the road," Davidson said.

"And a lot of students will take that and think well that's free money to enjoy not realizing it could be the next 20 years that they're going to be paying on that," Miller said.

Miller said he sees people in their 50's still paying off student debt; they think stretching their payments out over time makes for lower monthly payments, but it can cost more in the long run when you factor in interest.

The Wallet Hub study measured indebtedness, including average student debt, number of students with debt, and unemployment rate.