The average college student who graduated in 2011 had $26,600 in student loans, according to a new report, which estimates two-thirds of last year’s college graduates had student loan debt.
The average debt is the largest since the Institute for College Access and Success began compiling the figures in 2005, and it comes amid soaring college costs, record loan defaults, and a persistently difficult job market for college graduates.
While unemployment among college graduates is only slightly higher than the overall rate, the study found a stunning 37.8 percent of recent graduates are working in jobs that do not require a college degree. The study said that means wages are depressed, making the situation for graduates even more difficult.
“Recent college graduates have entered an enormously difficult job market, which poses particular challenges for those who need to begin paying back student loans,” the study said.
Indeed, the report cites recent U.S. Department of Education Data which show the federal student loan default rate at its highest level in 14 years. The New York Federal Reserve recently reported more than five million student loan borrowers have at least one loan past due.
For the Class of 2011, the study said, graduation has been an especially rude awakening.
“Most students in the Class of 2011 started college before the recent economic downturn,
but the economy soured while they were in school, widening the gap between rising college costs and what students and their parents could afford,” the study said.
The nation’s soaring student debt — which recently topped $1 trillion — has sparked debate over whether a college education is worth the price in the current job market. But the study noted that unemployment for young workers with only a high school education is more than twice the rate of their college-educated counterparts.
Compounding the problem, the study said, are state budget cuts, which have led to large tuition increases, fewer grants, and an increasing need for college students and their families to borrow money to finance their education.
The study found wide variations in indebtedness from state to state, with the largest debts concentrated mostly in the Northeast.
The most indebted state is New Hampshire, with an average debt of $32,440, followed by Pennsylvania at $29,959, Minnesota at $29,793, Rhode Island at $29,097, and Connecticut at $28,783.
The state with the smallest average debt is Utah at $17,227, followed by Hawaii at $17,447, California at $18,879, Arizona at $19,950, and Nevada at $19,954.
Alabama A&M University, a public college in Huntsville, and the College of Mount St. Joseph, a private non-profit college in Cincinnati, were among those who had the highest average debt, according to the study.
The study found 20 colleges it listed as “low-debt,” averaging between $3,000 and $9,750. While it did not rank the colleges by debt level, the list includes Yale University, Hunter College in New York, and the California State University Campuses in Bakersfield and Sacramento.
Missing from the study are for-profit colleges, which critics say have worsened the student debt crisis. The study cited data showing 96 percent of graduates from four-year, for-profit colleges took out student loans, borrowing 45 percent more than graduates of other types of colleges.
But the study said so few for-profit colleges report their data that it is impossible to include them in the results.
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