A new report from the Institute for College Access and Success (TICAS) has bad if not suprising news for recent and future grads: average student debt for the class of 2011 rose 5 percent to $26,600 up from $25,250 in 2010.
TICAS points out that this number could be even higher, since their findings rely on data provided voluntarily by colleges and universities and many declined to report.
And while the employment picture for young people only marginally improved last month, as Catherine Ruetschlin demonstrated, the report emphasizes that the investment remains worthwhile. Young people with only a high school diploma faced an unemployment rate of 19.1 percent in 2011, ten points higher than for college graduates.
Some other findings from the report include:
- State averages for debt at graduation in 2011 ranged from $17,250 to $32,450. High-debt states remain concentrated in the Northeast and Midwest, with low-debt states mainly in the West and South. New Hampshire had the highest average debt at $32,450, followed by Pennsylvania at $29,950. Utah and Hawaii had the lowest and second lowest average debt at $17,250 and $17,450.
- Among all colleges with usable data, the percentage of graduates with debt ranges from 12% to 100%. Sixty-five colleges reported more than 90% of their class of 2011 graduating with debt.
TICAS's recommendations include requiring the federal government to provide more information for students and families -- something the CFPB is working to implement -- and for the government to require school certification of all private loans.
These recommendations are solid but forgive us for mentioning some of our own that we published in our report The Great Cost Shift, which targeted a huge driver in the rise of student debt: state disinvestment.
- States should reorient their financial aid policies back toward need-based aid. Although there is nothing inherently wrong with awarding some financial aid on the basis of merit, the current aid framework that exists in many states prioritizes merit aid to the near exclusion of need-based aid. This creates situations in which public resources intended to promote college access benefit the students most apt to 33afford higher education without the assistance. Students of modest means who actually need the financial aid, in contrast, receive little help. This is especially true for students at two-year institutions since merit aid programs generally target students attending four-year universities.
- States should think more systematically about how they incorporate borrowing into financial aid programs. States therefore should take efforts to regulate the use of debt and to steer students toward more affordable sources of debt like the federal student loan program.
Read more from TICAS and from our report, The Great Cost Shift.