The amount that students with college loans owed at graduation grew last year, although the amount owed per student varies greatly by state.
Graduates with college debt in New Hampshire owed an average of $33,000, while their peers in New Mexico owed $19,000 when they finished school. The national average debt load was $28,400, which is 2 percent higher than it was in 2012, according to a new analysis by the Institute for College Access and Success.
Related: Pros and Cons of Paying Off Your Student Loans Early
“A college degree is still the best path to a job and decent pay, and while loans are increasingly needed to get through school, graduating with burdensome debt is not a foregone conclusion,” TICAS president Lauren Asher said in a statement. “Where you go to college matters, and the kind of loans you have matter, too.”
WHY THIS MATTERS
Student debt levels in the U.S. have reached an all-time high of $1.2 trillion – an 84 percent jump since the Great Recession. Overburdened by their college loans, young people starting out in life can’t afford to buy homes, cars or other big-ticket items – affecting not just the overall economy but their pursuit of important personal goals.
The report found that seven in 10 college seniors had loans at graduation. About 20 percent of new graduates’ debt was in private loans, which tend to be more expensive and offer less favorable repayment options than federal student loans.
Related: The Crazy Price Tag of College Consultants
The report makes several policy recommendations aimed at reducing student debt levels, including increasing Pell Grants, preventing state disinvestment, helping students make more informed borrowing choices, and simplifying and promoting repayment plans.
Many Americans struggling to cope with student debt could get relief from debt repayment programs—but they either don’t know about them or aren’t aware that they qualify.
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