2014 Graduates Had Highest Student Loan Debt Ever

Students who graduated from college in 2014 were only slightly more likely to have done so with loan debt than their peers a decade ago, according to a new report – but their debt amount was significantly higher.

In fact, the 10th annual report from The Institute for College Access and Success, or TICAS, showed that over the 10-year period from 2004 to 2014, students' average debt at graduation rose 56 percent, from $18,550 to $28,950. That's despite only a small difference in the percentage of students who graduated with debt in 2004 (65 percent) and 2014 (69 percent).

[READ: Biden Calls for 4 Years of Free College]

“Borrowers are graduating with a lot more debt than they did 10 years ago, and the class of 2014’s average debt is the highest yet,” TICAS President Lauren Asher said.

For the first time, the TICAS report analyzed how graduates’ debt changed over the last decade. They found that nationally, the average debt for new bachelor’s degree recipients increased at more than double the rate of inflation from 2004 to 2014. In some states – including Delaware, Hawaii, Illinois, Kentucky and Maryland – it grew even faster.

The report showed that the average debt of $28,950 for 2014 graduates was a 2 percent increase from the 2013 amount.

In addition, 17 percent of the debt students graduated with last year was from private student loans rather than federal student loans, which typically include more flexible repayment options.  

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. Officials also have sought to make it easier for students to tap into federal student aid.

“Student debt has rightly become a major policy issue,” Asher said. “Students and families need better information and better policies to make college more affordable and debt less burdensome.”

While tuition costs and student loan debt continue to increase, the report points out that earning a postsecondary degree is still worth the financial burden.

[ALSO: Study: Students Burdened By Local, State and Federal Tests]

“Despite rising debt levels, a college degree is still the best path to a job and decent pay,” said Debbie Cochrane, a report co-author and research director at TICAS. “For students who don’t graduate, loans are much harder to repay. 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. And while that’s down from the prior few years, it's still higher than what was typical more than a decade before the Great Recession, the report found. In addition, the unemployment rate for new college graduates remained less than half the rate – 14.7 percent – for young high school graduates.

Overall, the report found variations in debt levels across states and colleges.

State averages for debt at graduation in 2014 ranged from $18,900 to $33,800, and new graduates’ likelihood of having debt ranged from 46 to 76 percent.

In six states, average debt was more than $30,000, with high-debt states concentrated in the Northeast and Midwest, and low-debt states mainly in the West.

At the college level, debt varies even more, from a low of $4,750 to a high of $60,750. The share of students graduating with loans ranges from 2 percent to 100 percent. 

There were some limitations to the TICAS report, however. Since colleges are not required to report debt levels for their graduates, the quality of reported data varies. For 2014 graduates, 56 percent of public and nonprofit colleges provided data.

The report did not take into account students graduating from for-profit colleges.

[MORE: U.S. Graduation Rates Continue to Rise]

Matthew Reed, a report co-author and program director at TICAS, also warned that the data aren't perfect because even colleges that do report may underestimate what graduates owe, since they don’t take into account students who transfer and also may not know about private student loans.

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 some type of risk-sharing debt policy between states and schools for students that enter default; and improving loan counseling.