College seniors who graduated in 2009 carried an average of $24,000 in student loan debt, up 6% from 2008, according to a recent report from the Project on Student Debt.
According to the research group, the 6% increase in debt is similar to the average annual increase during the past four years, despite the recession. The consistency is attributed to the fact that most college seniors took out the bulk of their student loans before the recession began.
Additionally, the report says, many colleges made efforts to increase or maintain need-based aid when the economy faltered so that students could afford to stay in school.
Regardless, the report attributes the debt to the “unique challenges” that graduates experience upon leaving school, specifically their inability to secure employment upon graduation. Currently, the unemployment rate for college graduates age 20 to 24 rose from 5.8% in 2008 to 8.7% in 2009, which is the highest annual rate on record.
The Project on Student Debt cultivated its figures by analyzing more than 1,000 public and private nonprofit four-year institutions.
While averages for debt at graduation from four-year colleges ranged widely in 2009, from $13,000 to $30,000, states in the Northeast were disproportionately represented among the “high debt” states, and those in the West were disproportionately represented among the “low debt” states.
Students graduating in the District of Columbia and New Hampshire carried the most debt, with $30,033 and $29,443, respectively, while students graduating in Utah and Georgia carried the least with an average of $12,860 and 16,568. You can check the report for a full list of rankings.
The average debt continued to vary even more depending on the school, ranging from $3,000 to $61,500. Colleges with higher tuition tend to have higher average debt. However, as the report points out, there are many examples of high tuition and low average debt and vice versa.
“With student debt rising and jobs hard to come by, it’s more important than ever to shop around whendeciding where to go to college,” Lauren Asher, president of the Institute for College Access & Success, which runs Project on Student Debt, said in a press release. “This report shows that debt levels vary widely , not only from state to state but also from college to college, even when the sticker prices look the same.”
For-profit colleges are not included in the analysis as so few of these schools provided the necessary data. Only seven for-profit colleges reported student debt data this year. The lack of participation is notable, considering that recent data released for the U.S. Department of Education show that students who graduate from for-profit four-year colleges are much more likely to borrow (and then default on loans) than their public or nonprofit counterparts.
Generally speaking, the department’s data showed that 7% of federal student loan borrowers defaulted within two years of beginning repayment, up from 6.7% the previous year. Put another way, more than 238,000 of the 3.4 million students couldn’t pay back the money they owed.
Check out this MainStreet article for more information on how to pay down student loans.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.