The Trump administration restarted collections on defaulted federal student loans this month, targeting more than five million borrowers who haven’t made payments in months — or, in some cases, years.
As of 2025, total outstanding federal student loan debt in the U.S. stands at approximately $1.7 trillion, owed by more than 40 million borrowers. Over 5 million are currently in default.
Many of those borrowers now face aggressive consequences: wage garnishment, loss of tax refunds, and cuts to Social Security benefits. These measures, paused during the pandemic, are returning in full force as the Department of Education reactivates pre-2020 collection protocols. And in some cities, their impact will be particularly felt.
WalletHub set out to find the cities with the most and least student debt, analyzing the ratio of median student debt to the median earnings of a Bachelor’s Degree holder.
“College has become much more expensive over the past few decades, with cost increases far outpacing inflation. When you combine that with relatively high interest rates, it’s no wonder that the U.S. has so much student debt,” said WalletHub analyst Chip Lupo. “Because of how expensive this debt can be, it’s ideal for students to live in a place where they can maximize their income and put as much money as possible toward finally paying off their education.”
Continue reading to see the cities where people have the most student debt — and the cities where people have the least.
Additional reporting by Catherine Baab
