Student Loan Crisis Update: College Graduates’ Debt ‘Highest Yet’ With $28950

Students who graduated in 2014 from Illinois colleges left with average debt of $28,984 – ranking 16th among states in terms of debt burdens, according to the study.

A new report from the nonprofit the Project on Student Debt at the Institute for College Access & Success shows the average 2014 graduate of a Michigan college had $29,450 to pay back on federal student loans.

A variety of factors account for the state-by-state differences, including state policies and grant aid, as well as endowment resources and student demographics, Asher said. Still, TICAS found the class of 2014 graduated with a record high amount of debt.

Nationally, average debt for new bachelor’s degree recipients rose at more than double the rate of inflation from 2004 to 2014, from $18,550 to $28,950. The report overwhelmingly used debt figures from public and nonprofit higher education institutions because for-profit colleges typically do not voluntarily report graduate debt.

The report comes on the heels of a big push by the Obama administration to make it easier for students and their families to access information about colleges, including costs and estimated earnings after graduation.

“Student debt has rightly become a major policy issue”, Asher said.

“For students and families in Minnesota and around the country, college is getting more and more unaffordable, and students are taking on more and more debt”, he said in a news release.

Even with that, analysts argue a college degree is still worthwhile. “Even a small amount of debt can be burdensome if you have limited job options”.

The 2014 unemployment rate for young college graduates was 7.2 percent, according to the report.

Still, Pogemiller says schools need to try to keep costs down and offer more grants and other financial aid to students with lower and middle incomes.

Between 2004 and 2014, the share of funding states provide to public colleges dropped from 62% to 51%, and during the same period, the share of tuition colleges have asked families to pay grew from 32% to 43%, the report notes. On the low end, Utah and New Mexico each boast average debts under $19,000, compared to highs of more than $33,000 in New Hampshire and Delaware (see an interactive map of all state debt levels here.) Delaware tops the list of high debt states with an average $33,808.

Minnesota also has the third highest proportion of graduates in debt – 70 percent, although this has fallen from 72 percent ten years earlier. More than 42 million Americans have student loan debt today.

The data for the report was collected from 22 colleges and universities, including the University of Minnesota-Twin Cities, and several MnSCU schools and private colleges.

But what hasn’t changed much is the percentage of college students borrowing money. “Too many students continue to borrow private loans before exhausting their federal loan eligibility, increasing the cost and risks of borrowing”.

As in years past, TICAS made a series of common recommendations that include simplifying income-driven loan repayment programs; discouraging private student loans; ending eligibility for federal student loans at the worst-performing colleges; implementing a few type of risk-sharing debt policy between states and schools for students that enter default; and improving loan counseling.