Today’s graduating class will carry more debt than any other class in history. The average student loan debt at graduation rose from $18,550 in 2004 to $28,950 in 2014, a 56% increase, according to The Institute for College Access and Success. At the same time, the cost of tuition of a public four-year program at an in-state school rose 40% between 2005 to 2015 — less than the increase in loan debt.
According to the 10th annual “Student Debt and the Class of 2014,” published by The Institute for College Access and Success, the increase in student loan debts has varied considerably between states. Delaware’s average student loan debt increased by 129% in just 10 years, moving from seventh lowest in the nation in 2004 to the highest in 2014. 24/7 Wall St. reviewed all states to determine which had the highest amount of average student loan debt in 2014. Delaware had the highest average student loan debt at $33,808, while Utah had the lowest at $18,921.
While the national average student loan debt at graduation $28,950, the cost over the full term of the loan is much higher. Current federal loan interest rates range from 4.29% to 6.84%. At 5.0%, the $28,950 debt has a final cost, not including any fees, of $36,847 over a 10-year term — increasing the full cost by 27%.
> Avg. student loan debt:$29,450
> Median household income 25-44 yr. old: $54,168 (21st lowest)
> Student loan debt as pct. household income: 54.4% (8th highest)
> College attainment rate: 27.4% (18th lowest)
States with higher median household incomes tend to also have a higher average student loan debt. Of the 10 states with the highest average student loan debts, seven have median household incomes above the national average. Still, some states with similar student loan debts can have significantly different income levels, which can dramatically change how big the relative debt burden is.
Massachusetts and Alabama have nearly identical average student loan debts, at $29,391 and $29,425, respectively. However, the typical household in Massachusetts with a 25-44 year old head of household is $77,266 — $30,724 greater than the typical household in Alabama. So while the student loan debt is equal to 63% of the median yearly household income for in Alabama, it is only equal to 38% in of the income Massachusetts.
Using data from the report, “Student Debt and the Class of 2014” published by The Institute for College Access and Success, 24/7 Wall St. reviewed average student loan debt for new 2014 graduates in every state. TICAS also provided data on the average student loan debt in 2004. We also reviewed data on educational attainment and median household incomes from the U.S. Census Bureau. Median household income in all instances reflects households in which the head of household is a 25-44 years old. Interest rates Federal student loan interest rates are from Federal Student Aid, an Office of the U.S. Department of Education. North Dakota was excluded because there was not sufficient data available.