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Class of 2011 Sees Rise in Student Loan Debt



By Catherine Groux
Posted October 19, 2012 12:00 PM

The average student loan debt increased in 2011.
The average student loan debt increased in 2011.
As the cost of college continues to rise, it may come as no surprise that students are taking out more loans to pay for their education. A new report by the Project on Student Debt at The Institute for College Access & Success (TICAS) shows that since last year, student borrowing has risen.

Students Take Out More Loans

About 66% of the Class of 2011 graduated with loans, and among this group the average student loan burden was $26,600. This marked a 5% increase from 2010's average of $25,250.

The amount of money students borrowed for school largely depended on which state they lived in and which college they attended. For example, the average student debt among states spanned from $17,250 to $32,450, while the average at individual schools ranged from $3,000 to $55,250. While the most expensive colleges tended to have the highest average student debt levels, this was not always the case. Therefore, TICAS President Lauren Asher said students should do their own research on colleges' debt averages before picking a school.

"...As debt levels rise, fear of loans can prevent students from getting the education they need to succeed," she said. "Students and parents need to know that, even at similar looking schools, debt levels can be wildly different." 

Is College Still Worth It?

As students are being forced to take out more loans to cover their education, many are wondering if college is still a good investment. In recent years, various sources have confirmed that even as the price of higher education rises, college degree holders have a distinct advantage in the job market. In 2011, young high school graduates faced an unemployment rate of 19.1%, while this figure was cut in half for those who opted to earn a bachelor's degree, the Project on Student Debt states.

Still, not only are college graduates more likely to find a job than their peers, but they also tend to earn more money over the course of their careers, the Pew Research Center reports. Today, the average bachelor's degree holder makes $550,000 more than high school graduates throughout a 40-year career, even when the cost of college and foregone earnings are taken into account.

Tyler Cowen, an economics professor at George Mason University, wrote to The New York Times that while college graduates tend to earn more today than those with a high school diploma, the income gap will only continue to grow, making college an increasingly valuable investment.

"Thirty years ago, college graduates made 40% more than high school graduates, but now the gap is about 83%," he wrote. "Even a cashier with a college degree makes more than a cashier without a college degree."

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