Isn't just as simple as Strings are made up of characters arrays. I look at strings as character arrays[]. Therefore they are on the heap because the reference memory location is stored on the stack and points to the beginning of the array's memory location on the heap. The string size is not known before it is allocated ...perfect for the heap.
That is why a string is really immutable because when you change it even if it is of the same size the compiler doesn't know that and has to allocate a new array and assign characters to the positions in the array. It makes sense if you think of strings as a way that languages protect you from having to allocate memory on the fly (read C like programming)