Hello alucky,
'Status' of people refer to their social or professional position or the degree of importance and respect they have among a certain group or in public, what could be giving them certain privileges or particular rights.
On the other hand the 'state' of anyone refers to their condition or what they are like at a particular time.
Examples:
- He was in a state of total confusion,when hearing the news.
- People of higher status frequently visit this place.
The confusion between the 2 nouns might occur , when 'status' could also mean the state of affairs at a particular time as in someone's financial status.
Here you can't use the word 'state' instead.The later rather indicates circumstances, modes, attitudes or state of affairs,while 'status' refers here to facts and positions.