A lot of attention has been paid in recent years to the affordability of college and the amount of debt graduates are now leaving school with, and a new study shows just how dire the situation may be for many students.
Today, about two in every three college students now graduate with some amount of education debt, and while that might not seem especially high, the outstanding balances they owe on those loans certainly is, according to the Student Debt and the Class of 2011 report from the Project On Student Debt, its seventh annual offering. Today, those who leave school with student loan debt owe an average of $26,600, up 5 percent from the level seen in last year’s survey, and in line with increases seen in the past several years. Moreover, about 20 percent of those balances are made up of private loans.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
Of course, the average amount owed by borrowers tends to vary from state to state, the report said. In all, they ranged from less than $17,250 per graduate with debt, to nearly $32,450. The states with the most debt were located in both the Northeast and Midwest, with the lower-debt states coming mostly in the West and South.
The state in which borrowers graduated with the highest debt totals was New Hampshire, at $32,440 per graduate with a loan balance, the report said. Pennsylvania, Minnesota and Rhode Island all came in at more than $29,000, and Connecticut rounded out the top five with $28,783 in average student loan debts.
Meanwhile, Utah barely edged out Hawaii, $17,227 to $17,447 to claim the title of state with the lowest average student loan debt upon graduation, the report said. California ($18,879), Arizona ($19,950), and Nevada ($19,954) were all below the $20,000 threshold as well.
Where private student lending is concerned, the proportion of this type of financing upon which students end up having to rely can vary significantly from one school to the next, the report said. In all, that total could range from 0 to 73 percent, but in general, the more expensive a school, the more likely a borrower was to use private financing.
[Student Loans: Research and compare options for student loans at Credit.com]
Many experts have concerns about the growing size of student loan balances nationwide, and some have even projected that if the bubble were to burst, it could be just as bad as the housing meltdown.
Image: Schlüsselbein2007, via Flickr