Student Loan Repayments Will Affect These 10 States Most

Student loan borrowers in Pennsylvania, Mississippi and New Hampshire will reportedly be the most affected when a three-year pause on student loan payments due to the COVID-19 pandemic comes to an end.

Millions of Americans will have to start making payments starting in October, and interest on federal student loan debt began accruing again in September.

Many borrowers' hopes of having their debt wiped away or decreased were dashed when the U.S. Supreme Court struck down President Joe Biden's debt forgiveness plan in June.

According to personal finance company WalletHub, these are the states that will be most affected by the moratorium on student loan payments ending:

1. Pennsylvania
2. Mississippi
3. New Hampshire
4. Delaware
5. New Jersey
6. North Carolina
7. Connecticut
8. Wisconsin
9. Kentucky
10. Arkansas

States that will be least affected by the student loan payments restarting include: Wyoming, Washington, Montana, New Mexico and Idaho.

WalletHub determined which states would be most affected by the end of the moratorium by evaluating "student-loan indebtedness" and how many borrowers could benefit from the Saving on a Valuable Education (SAVE) Plan, a new income-driven repayment plan that the Biden administration has called the "most affordable student loan plan ever."

Points were allocated based on 12 metrics, including the average student debt per borrower, share of state residents with student debt, average student loan debt eligible for forgiveness per borrower and share of student loan borrowers eligible for forgiveness.

WalletHub found that the District of Columbia, Maryland, Georgia, Virginia and Florida have the highest average student debt per borrower, while Wyoming, Oklahoma, South Dakota, Iowa and North Dakota had the lowest.

The District of Columbia, Georgia, Ohio, Mississippi and South Carolina have the highest share of residents with student debt, while California, Utah, Wyoming, Alaska and Hawaii have the lowest.

Utah, Massachusetts, Hawaii, New Jersey and Connecticut have the lowest share of student loan borrowers eligible for forgiveness, while Vermont, Maine, South Dakota, Idaho and Montana have the highest.

Connecticut, New Jersey, Massachusetts, Hawaii and the District of Columbia have the lowest share of student loan debt eligible for forgiveness, while Iowa, Louisiana, North Dakota, South Dakota and Montana have the highest.

A recent poll for Newsweek found that one in four Americans will consider not making repayments when the payment paused ends in October. The repercussions of not making payments can be severe, and those who don't pay risk default and a hit to their credit rating.

However, Biden has announced a 12-month grace period to help borrowers struggling after payments restart. If they don't make payments in the 12 months after payments officially resume, they won't be at risk of default, and it won't affect their credit score. However, interest will accrue even if they don't make payments.

And under the SAVE Plan, more borrowers will be eligible to not make repayments.

The plan will not require them to make any payments if they earn less than 225 percent of the federal poverty line—$32,800 a year for a single person or $67,500 for a family of four. The cutoff for current plans is 150 percent of the poverty line, or $22,000 a year for a single person. And interest won't pile up as long as borrowers make regular payments.

Borrowers who would like to repay their federal student loans under an income-driven plan can apply through the Federal Student Aid website.

They can use the loan simulator tool at StudentAid.gov to calculate what their monthly payment would be under each available plan, and their long-term costs.