Average Student Debt Grows by 5 Percent to $26,600
Among the students who graduated with a bachelor's degree in the class of 2011, the average debt was $26,600a 5 percent increase over last year's graduates' debt, according to a report released today from the Project on Student Debt at the Institute for College Access and Success.
The percentage of students who borrowed remained the same as last year: 66 percent. The amount of indebtedness varied widely by college and region among the 1,057 institutions that voluntarily offered their data. Students in the Northeast and Midwest tended to have more loans than those in the West and South. The highest average debt was in New Hampshire ($32,440) and the lowest in Utah ($17,227).
The report includes a complete breakdown by state, as well as a list of colleges whose students incurred the highest and lowest debt, which ranged from an average of $3,000 to $55,250. At the campus level, the share of students graduating with loans ranged from 12 percent to 100 percent. (Click here for state-by-state data.)
Still, the investment in college paid off for students in the job market. Unemployment for young graduates was 8.8 percent, a slight improvement from 9.1 percent last yearalthough the report notes many with college degrees are underemployed. For those young graduates with just a high school diploma, the jobless rate was 19.1 percent.
To better inform consumers, the report recommends the federal government provide families with information about average debt at graduation for all colleges that receive federal funding. Noting that one-fifth of student debt is from more costly private loans, the Project on Student Debt suggests requiring schools "certify" students' private loans to counsel them to make sure they have exhausted all federal options first. Also, the organization advocates investing in federal need-based Pell Grants and continuing the American Opportunity Tax Credit to reduce families' need to borrow in the first place.
This report is in line with figures out in September from the Pew Research Center that showed 19 percent of households carried student-loan debt and the average borrower owed $26,682.
The "Student Debt and Class of 2011" report reflects only graduates of public and private nonprofit four-year colleges. It does not include information from for-profit colleges, since few opt to report the necessary student-debt data. Other reports have found graduates of for-profit four-year colleges are much more likely to borrow at higher rates than students in other higher education sectors. Students from for-profits also have higher default rates, according to recent data from the U.S. Department of Education.