DC Grads Burdened with the Highest Average Debt in the Nation

According to a recent study by the Project on Student Debt, 2008 graduates from DC colleges and universities carried the highest debt in the U.S., with average student loans nearing $30,000. Nationwide, average debt for graduating seniors rose from $18,650 in 2004 to $23,200 in 2008, or about six percent per year. DC grads topped the list with loans averaging $29,793.

Statewide average debt levels for the class of 2008 vary greatly. High-debt states are generally concentrated in the Northeast, while low-debt states are mostly in the West. In addition to DC, Iowa ($28,174) and Connecticut ($26,138) have grads with the highest debt. Utah ($13,041) and Hawaii ($15,156) have the lowest. Virginia came in 31st in the nation with student debt averaging $19,747, while Maryland ranked 37th with debts averaging $18,647.

An analysis of debt at the college level showed a huge variation with averages ranging from $5,000 to $106,000. Naturally, colleges with higher tuition tend to have higher average debt although exceptions to the rule exist. While declining to rank colleges based on debt, the report listed 24 high-debt public colleges and universities with averages ranging from $25,000 to $36,000. The 42 private colleges and universities designated as high-debt generally averaged between $35,000 and $55,000, with a few as high as between $55,000 and $106,000. Clarifying a New York Times report, Edie Irons, communications director for the Project on Student Debt, wrote “The averages are lower for public colleges ($20,200), higher for private nonprofits ($27,650), and much higher for for-profit schools ($33,050).” No local schools appeared on either high-debt list.

The study also contains a list of low-debt colleges reporting average debt of less than $10,000. While these colleges generally have lower tuition, three colleges (California Institute of Technology, Princeton, and Williams) have long-standing publicized financial aid policies that are specifically intended to minimize student debt, especially for students from low- and middle-income backgrounds.

The Project on Student Debt speculates that the reasons for high debt levels at both public and private colleges may include “high tuition, inadequate grant and scholarship programs for students with financial need, the cost of housing and other expenses in particular communities, or the demographic makeup of the graduating class.” The study also suggests that how campuses calculate and report debt may result in “some schools having averages that are much higher than the national average.” It’s also worth noting that a number of colleges and universities declined to provide data to the clearinghouse used as a source of information for the report.

In response to comments complaining that reported averages seem on the low side, Ms. Irons concludes, “These are all averages, so we know that many students…borrow much more. The number of undergrads taking out twice the national average has grown at an alarming rate, but that is still a minority of borrowers. If looking at astronomical college costs makes one wonder why average debt isn’t higher, remember that many students get grant aid or pay a lot out of pocket.” They also take out large personal loans which are reported nowhere and not included in the study.