Published in: Student Loans | Oct. 24, 2019

Utah Has the Lowest Average Student Loan Debt. What's Its Secret?

By:  Lyle Daly

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Does Utah have the solution to the student debt crisis?

There's no state that's immune to student debt, but some states seem to manage it better than others. Case in point -- Utah, which has the lowest average student loan balance of any state.

The question is why students in Utah have significantly less debt than those in any other state. Is it cheaper schools? Something in the water?

As you're about to learn, college costs play a part, but the x-factor could be the religious demographics in Utah.

A Welcome to Utah sign next to a desert highway.

Image source: Getty Images

Average student loan debt in Utah

As of 2017, the average student loan balance in Utah was $18,838. That's significantly lower than the national average of $28,650.

Utah is notable for being the only state with an average student loan balance of under $20,000. New Mexico, which had the second-lowest student loan balance, still had an average of $21,237.

This isn't the only metric where Utah excels. Only 38% of students in the state have student loan debt, which is also the lowest number in the nation.

Are college costs lower in Utah?

The obvious reason why student loan balances would be much higher in some states than others is tuition costs, and there's evidence that this could play a part in Utah.

According to the 2018 report from the College Board on trends in pricing, the average tuition and fees at Utah's public four-year institutions are $6,990, which is the third-lowest in the nation. The only two states ahead of Utah in that ranking, Wyoming and Florida, are also in the bottom 10 for average student loan balances.

Utah is home to Brigham Young University, a private university that's considered one of the country's best schools in terms of value. Its tuition and fees are $5,790 for the 2019–20 school year, which is significantly less expensive than most private colleges. The LDS church operates the school and subsidizes education costs there, which is one reason why tuition at BYU is so affordable.

While low tuition is one factor, it'd be a stretch to say that it's entirely responsible for Utah's low student loan debt. The rates at its public four-year schools and BYU are reasonable, but at its public two-year schools, they are actually a bit higher than the national average.

For a more likely cause of the state's low student loan debt, we need to look at its culture.

The effect of religion on student financial habits

There's probably no state more strongly associated with a single religion than Utah. It's well-known for having a large Mormon population, and statistics confirm that this isn't a misconception. Pew Research Center reports that 55% of adults in Utah identify as Mormon, compared to only 1.6% of adults throughout the United States.

A tenet of Mormonism is to avoid debt whenever possible, and if you need to incur debt, then you should repay it as quickly as you can. In fact, the LDS Church even has specific guidance on paying for college, recommending that students:

  • Work during high school and college to save money
  • Take their studies seriously, which can help them achieve good grades and obtain scholarships
  • Apply for financial aid
  • Only apply for student loans as a last resort and don't borrow more than necessary

Whatever your opinion of the religion itself, there's no denying that the above tips are all great advice. In fact, they are the perfect strategies to keep your college costs down and avoid excessive student loan debt.

The attitude that Mormons have towards debt is a huge part of why students in Utah get through school with lower student loan balances. They're wary of debt because of the state's culture, and many will work part-time so they don't need to borrow as much.

Utah's recipe for low student loan debt

While low college costs help students in Utah minimize their debt, the state's culture is the real key to its success.

The good thing is that the strategy many students in Utah use is replicable no matter where you go to school or what your religious beliefs are. You can follow the advice above in any state and graduate with a more manageable student loan balance.

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