Student Debt and the Class of 2008

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Pew Charitable Trusts

The rate of unemployment for college graduates ages 20-24 in 2008 was 7.6 percent; it rose to a record-breaking 10.6 percent near the end of 2009. While in these tough times, many young adults are facing unemployment after graduation, many are also struggling to pay student loan debts. On a national average, loans for graduates grew from $18,650 in 2004 to $23,200 in 2008, which equals growth of about 6 percent per year.

Data show that students with higher debts are mostly in the Northeast, where more than the average number of students attended private colleges as well as public and/or private colleges with higher than average tuition rates. Low-debt states were found to be mostly in the West, where more students chose to attend public colleges, especially public colleges with lower than average tuition rates. High-debt states included the District of Columbia, Iowa, Connecticut and New York while low-debt states included Utah, Hawaii, Kentucky and Wyoming.

The report suggests that there are multiple reasons for differences in state average debt levels for colleges, including student demographics, resources for funding and financial aid, state policies, and the cost of living. It also explains that institutions may or may not choose to respond to surveys, let alone receive them. Questions may be interpreted differently and there may be miscalculations in figures. Relevant data to analyze student debt is collected through the Common Data Set application form. It is important to collect accurate student debt data from colleges and universities, as the information is useful to researchers and policymakers in understanding loans and borrowing and helping to solve student debt problems.

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