Borrowers' Average Debt at Graduation Climbs to $29,400

December 04, 2013

Seventy-one percent of students who graduated from four-year colleges in 2012 had student loans, an average of $29,400, according to a report released on Wednesday offering the most accurate assessment of borrowing nationally in years.

The report, "Student Debt and the Class of 2012," was produced by the Project on Student Debt, part of the nonprofit Institute for College Access & Success. It also breaks down borrowing by state and by college, where institutions—55 percent of public and private nonprofit ones, representing four-fifths of all graduates—provide the necessary data.

The national average-debt figure, which has risen in recent years, belies considerable variation, said Lauren Asher, president of the institute, known as Ticas. At individual colleges that provided data, average debt per borrower was as low as $4,450 and as high as $49,450. The share of borrowers in each campus's Class of 2012 ranged from 6 percent to 100 percent.

Such variation, Ms. Asher said, "reinforces the need for consumer information and tools"—and for better data.

Borrowing and debt level vary considerably by sector, according to Ticas figures not included in the report. At public colleges, two-thirds of graduates had borrowed, and their average debt was $25,500. At private nonprofits, three-quarters of graduates had borrowed, $32,300 on average. And at for-profits, 88 percent of graduates had borrowed, with an average debt of $39,950.

Over all, both the share of graduates with debt and the average amount they borrowed have grown in recent years. In 2008, 68 percent of graduates had borrowed, and their average debt was $23,450. Over four years, then, that average burden went up by more than 25 percent.

As college prices rise and families shoulder a greater share, borrowing has become more common, Ms. Asher said. At public colleges, tuition increases in the face of state budget cuts have helped fuel that trend.

Yet the public seems to blame colleges the most. A recent poll of young Americans by Harvard University's Institute of Politics found that 42 percent said colleges were "most responsible for the rising amount of student debt in the U.S." Thirty percent said the federal government was most responsible, and 9 percent said state governments were.

'Crucial' Information

While student debt is growing, Ms. Asher cautioned that this year's national figure—based on new federal data—can't be compared with last year's.

The federal government's National Postsecondary Student Aid Study provides the best available national student-debt data, but it releases results only every four years or so. In between, the Project on Student Debt estimates a national figure based on the most recent federal study and college-level data voluntarily reported to Peterson's, a guidebook publisher. This year's report is based on the new federal study, which also updated the national figures for 2008.

Also, because so few for-profit colleges release their borrowing data, the nonprofit group's off-year estimates include only public and private nonprofit institutions. That results in a lower average-debt figure, because students at for-profit colleges are more likely to borrow and have higher average debt.

But while the new report provides relatively comprehensive information, even the picture it paints is incomplete. Data on private loans are limited, including only those the colleges are aware of. And debt totals reflect only loans taken out by students themselves, excluding what their parents may have borrowed.

Complete college-level data should be available each year, Ms. Asher said. "For consumers and policy makers," she said, "it's crucial to have information on debt at graduation for every school."