Average Student Loan Debt Jumps 10 Percent

Average student loan debt is approaching $30,000, but may be much higher in some regions.

A new report finds average student loan debt grew more than 10 percent in one year, up to $29,400 in 2012.
By SHARE

Average student loan debt reached a new high in 2012 of nearly $30,000, according to data released Wednesday by the Institute for College Access and Success, also known as TICAS.

The nonprofit advocacy group found that seven in 10 college seniors graduated in 2012 with student debt, which on average was $29,400. In some states the average debt was as high as $33,650, and in others as low as $18,000. Likewise, colleges had average student debt levels ranging from $4,450 to $49,450.

[READ: Undergrads Around the World Face Student Loan Debt]

"Despite discouraging headlines, a college degree remains the best route to finding a job in this tight market. But students and families need to know that debt levels can vary widely from college to college," said TICAS President Lauren Asher, in a statement.

By comparison, TICAS found 68 percent of students who graduated in 2011 had accrued some amount of debt, but the average was $26,600, 10 percent lower than in 2012.

But because the 2011 report drew from a different data source, a more accurate and direct comparison can be made between the 2012 and 2008 figures, which come from the National Postsecondary Student Aid Study, conducted by the Department of Education every four years. The findings from the 2011 report are an estimation based on data for the national average change reported by Peterson's, which publishes college guides. 

In 2008, TICAS reported 68 percent of graduating seniors had debt, with an average of $23,450 per borrower. Between 2008 and 2012, TICAS estimates average student loan debt increased by an average of 6 percent each year.

Asher said if students need to take out loans to pay for college, federal loans are the most secure way to do so, because they provide more consumer protections and have more flexible repayment options, such as the Income-Based Repayment plan and the Pay As You Earn plan.

Still, TICAS found that one-fifth of student loan debt comes from private loans.

In the report, TICAS makes several recommendations for ways to reduce the need for students to take out loans, including increasing awareness for federal loan repayment plans and allowing students to apply for federal financial aid earlier.

The Department of Education on Wednesday announced the launch of its online "one-stop shop," for example, which is aimed at helping counselors guide students through the ins and outs of financial aid.

"By equipping counselors and mentors with financial aid information, we can help to ensure current and potential students are getting the assistance they need to successfully navigate the process of planning and paying for a postsecondary education," Secretary of Education Arne Duncan said in a statement.

Since colleges are not required by law to report their own graduates' debt, TICAS used data provided voluntarily by public and private nonprofit four-year universities to calculate state- and college-level debt averages.

[ALSO: Student Loan Default Rates Rise for Sixth Year]

"For profit colleges, which accounted for 7 percent of 2012 bachelor's recipients, are not included in these estimates because virtually none chose to share their data," TICAS said in a statement.

According to the report, only nine of 584 for-profit, four-year, bachelor's-granting colleges reported figures for students who graduated in 2012. Still, national data show that more than three-quarters (88 percent) of graduates from for-profit colleges took out student loans, and borrowed 43 percent more than other students, the report says.

Aside from the lack of data from for-profit colleges, TICAS notes that other holes prevent the federal government and other organizations from providing an entirely complete picture of the state of student loan debt.

College-level debt figures may be underestimated, for example, because those numbers don't take into account transfer students, and can miss private loans students have that the college may be unaware of. Additionally, state averages may be higher than currently reported because those figures are based off of the available college data.


Corrected on : Updated 12/18/13: This story has been modified to clarify data sources and provide a more accurate comparison of average student loan debt.