Except for mortgages, student loans constitute the largest component of household debt for Americans.

At the end of the first quarter of 2016, total outstanding college-loan balances disclosed on credit reports stood at $1.26 trillion, according to the Federal Reserve Bank of New York. The latest figure represents an increase of $29 billion from the previous quarter and $72 billion from a year ago.

The personal finance website WalletHub conducted an in-depth analysis to determine 2016’s Best and Worst States for Student Debt.

“Post-college success depends on numerous factors, including where a graduate chooses to put down roots,” according to WalletHub. “Student-loan borrowers generally fare better in strong-economy states with low college-debt-to-income ratios.”

In order to identify the best states for student debt, WalletHub’s analysts compared the 50 states and the District of Columbia across two key dimensions, namely Student loan indebtedness and “grant and work opportunities for students.”

Student-loan indebtedness was ranked based on a state’s average student debt, proportion of students with debt, student debt as a percentage of income, percentage of student loans in past-due or default status, and percentage of student-loan borrowers age 50 and older.

(Related: 10 Worst States for Paying Off Student Loan Debt and 30 Best Paying College Majors: 2016)

Meanwhile a state’s “grant and work opportunities for students” was scored based on its unemployment rate for people age 25 to 34, availability of student jobs, availability of paid internships and availability of grants.

Data used to create these rankings were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Institute for College Access & Success, Federal Reserve Bank of New York, Council for Community and Economic Research, U.S. Department of Education College Affordability & Transparency Center, Internships.com and Indeed.

Based on WalletHub’s analysis, these 10 states are friendliest toward student-loan debtors:

Church of San Felipe in Albuquerque.

New Mexico

Overall rank: 10

Total score: 63.11

Student loan indebtedness rank: 8

Grant and work opportunities for students rank: 46

New Mexico has the second lowest average student debt and the fifth lowest proportion of students with debt. Interestingly, New Mexico also has one of the highest unemployment rates for people aged 25 to 34 and one of the highest percentages of student loan balances past due or in default.  

Waikiki shoreline in Honolulu.

Hawaii

Overall rank: 9

Total score: 63.94

Student loan indebtedness rank: 10

Grant and work opportunities for students rank: 16

Hawaii has the third lowest proportion of students with debt and the lowest percentage of student-loan borrowers aged 50 or older at 4.01%, which is 2.6 times lower than in Vermont, where the percentage is highest at 10.33%. However, Hawaii also has among the highest student debt as a percentage of income (adjusted for cost of living).

Denver Brocons Fans. (Photo: AP)

Colorado

Overall rank: 8

Total score: 64.40

Student loan indebtedness rank: 15

Grant and work opportunities for studentsrank: 10

Colorado has the fifth lowest unemployment rate for people aged 25 to 34, according to WalletHub. According to the Institute for College Access & Success, the average student loan debt in Colorado is $25,064, and the proportion of students with debt is 56%.

Crabbers on the fishing grounds in southeast Alaska. (Photo: AP)

Alaska

Overall rank: 7

Total score: 65.78

Student loan indebtedness rank: 6

Grant and work opportunities for students rank: 39

The average student loan debt is $26,742 in Alaska, which includes debt from both public and private four-year institutions, according to the Institute for College Access & Success. The proportion of students with debt in Alaska as of 2014 is 50%.

A view of Seattle's Space Needle and skyline. (Photo: AP)

Washington

Overall rank: 6

Total score: 67.47

Student loan indebtedness rank: 5

Grant and work opportunities for students rank: 48

In Washington, the average student loan debt amount is $24,804, according to the Institute for College Access & Success. The proportion of students with debt was 58% as of 2014.

Virginia Beach Boardwalk and Bike Path.

Virginia

Overall rank: 5

Total score: 68.62

Student loan indebtedness rank: 7

Grant and work opportunities for students rank: 7

Of the 50 states and District of Columbia, Virginia has the fifth lowest student debt as a percentage of income (adjusted for cost of living). Virginia also has the highest grant and work opportunities for students rank among the top 10 states for student debt, which means it has more available paid internships and student jobs.

Fremont Street in Las Vegas. (Photo: AP)

Nevada

Overall rank: 4

Total score: 69.54

Student loan indebtedness rank: 4

Grant and work opportunities for students rank: 37

Nevada has the lowest proportion of students with debt – tied with Wyoming. Nevada also has the third lowest average student debt. It also has the third lowest percentage of student loan borrowers aged 50 and older.

State Capitol in Bismarck. (Photo: AP)

North Dakota

Overall rank: 3

Total score: 70.14

Student loan indebtedness rank: 3

Grant and work opportunities for students rank: 31

North Dakota has the third lowest student debt as a percentage of income, adjusted for cost of living. It also has the third lowest unemployment rate for people aged 25 to 34. And North Dakota has the second lowest percentage of student loan balances past due or in default.

A rider in the Tour de Wyoming. (Photo: AP)

Wyoming

Overall rank: 2

Total score: 79.33

Student loan indebtedness rank: 2

Grant and work opportunities for students rank: 47

Wyoming has the lowest proportion of students with debt at 46%, which is 1.7 times lower than in New Hampshire, where the proportion is highest at 76%. Wyoming also has the lowest student debt as a percentage of income (adjusted for cost of living) at 29.63%, which is 2.3 times lower than in the District of Columbia, where the student-debt portion of income is highest at 67.47%. 

Mormon Temple in Salt Lake City. (Photo: AP)

Utah

Overall rank: 1

Total score: 84.18

Student loan indebtedness rank: 1

Grant and work opportunities for students rank: 21

Utah has the lowest average student debt, which comes in at $18,921. According to Wallethub, this is 1.8 times lower than in Delaware, where the average is the highest among all 50 states at $33,808. Utah also ties with Nebraska for the lowest unemployment rate for people aged 25 to 34. It also has the second lowest student debt as a percentage of income (adjusted for cost of living) and the fifth lowest percentage of student-loan borrowers aged 50 and older.  

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