The Average Amount of Debt After College
College costs are soaring, and for many students the only way to pay for higher education is to borrow money. The result is an ever-rising level of student-loan debt. The situation grows worse as state governments raise tuition rates at public universities and junior colleges in an attempt to balance their budgets. Since 2008, many graduates have found that a college degree doesn't guarantee good-paying positions.
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Debt and Unemployment
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According to the Institute for College Access and Success, the average debt of 2009 graduates stood at $24,000, a figure almost double the $13,200 average that students experienced in 1996. One out of 10 students who completed four-year degrees owed more than $40,000 in student loans. At the same time, the unemployment rate for graduates age 20 to 24 rose from 5.8 percent to 8.7 percent from 2008 to 2009.
Recession and Student Deb
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The report Student Debt and the Class of 2009 explains that the average debt level for college graduates rose 6 percent from 2008 to 2009. Many students in this class contracted their loans before the recession of 2008, at a time when credit standards were easier. As a result, many graduates are finding themselves with high debt levels in a tough economy.
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Geographical Breakdown
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The higher debt is concentrated among students in the northeastern U.S., while lower debt prevails in the Midwest and West. The District of Columbia tops the list at an average of $30,033, followed by New Hampshire at $29,443 and Maine at $29,143. States with lowest average debt included Utah at $12,860, Georgia, at $16,658, and Nevada at $16,742. The Western states have a higher proportion of students attending public colleges, while high-tuition private schools are more popular in the Northeast.
Defaults and Bankruptcy
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Defaults on student loans are also high. A survey in Forbes.com listed Bloomfield College in New Jersey as the institution with the highest default rate, at 9.8 percent. Student loans guaranteed by the federal government are not discharged in bankruptcy, and remain on a credit report as long as they are in arrears.
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References
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