Student Debt and the Class of 2012 is our eighth annual report on the cumulative student loan debt of recent graduates from four-year colleges. Our analysis finds that the debt levels of students who graduate with loans continue to rise, with considerable variation among states as well as among colleges.
Seven in 10 college seniors who graduated in 2012 had student loan debt, with an average of $29,400 for those with loans. The national share of seniors graduating with loans rose in recent years, from 68 percent in 2008 to 71 percent in 2012, while their debt at graduation increased by an average of six percent per year. Even though the financial crisis caused a substantial decline in private education lending while these borrowers were in school, about one-fifth (20%) of their debt is comprised of private loans, which are typically more costly and provide fewer consumer protections and repayment options than safer federal loans.2
State averages for debt at graduation ranged widely in 2012, from $18,000 to $33,650, and graduating seniors’ likelihood of having debt ranged from 41 percent to 78 percent. In five states, average debt was more than $30,000. High-debt states remain concentrated in the Northeast and Midwest, with low-debt states mainly in the West and South.
Average debt varies even more at the college level than at the state level, from $4,450 to $49,450. Colleges with higher costs tend to have higher average debt, but there are many examples of high-cost colleges with low average debt, and vice versa.
It is important to note that the state and college debt figures in this report reflect only graduates of public and private nonprofit four-year colleges, because so few for-profit colleges choose to report the necessary data. Every four years, including 2012, a federal survey collects the data needed to calculate national debt figures for new graduates of all types of colleges. However, this survey does not provide state- or college-level data, and colleges are not required to report their own graduates’ debt. That is why we use data provided voluntarily by many public and nonprofit colleges to estimate state averages and identify high- and low-debt schools. The vast majority of the Class of 2012 graduated from public and nonprofit colleges.
Nationally, 68 percent of 2012 graduates of public and private nonprofit four-year colleges had student debt, with an average of $27,850 per borrower. These are lower than the overall national figures because they do not include for-profit college graduates, who are more likely to borrow and graduate with more debt.
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