There is no “student ghetto” surrounding MSU and there aren't too many students who live in their own apartments nearby. This is mostly because housing prices are fairly ridiculous in Montclair, as well as many of the surrounding towns, where houses regularly cost more than $1 million. The cheaper areas are a bit sketchy and include Newark, which is about a 20 minute drive away. So, in the end most students are turned off from living in their own apartment off campus because of cost or location, so many continue to live at home and save money.
However, some students do brave the cost or the slightly bad conditions and rent their own apartments, but most are about 10 to 15 minutes from campus. The quality of these apartments varies—most cannot be described as very nice, but they all seem livable. The best way to find an apartment in the area is to start looking before the semester ends and attempt to find landlords who are renting directly, instead of going through a realty agency. It's much more likely to be cheaper and nicer if you do most of the legwork yourself. Craigslist and word of mouth are the best ways to hear about places, and it takes a lot of persistence, but if you are dead set on living in the area but don’t want to live on campus, it's really the best way to go.