MINNEAPOLIS (KMSP) -
Two-thirds of college graduates in 2011 finished school with student loan debt, carrying an average debt of $26,600 into their post-collegiate life -- up about 5 percent from the class before.
The student loan debt numbers are in a report out Thursday from the California-based Institute for College Access and Success (TICAS).
Minnesota graduates carry the third highest average debt, at $29,739 per student. The state also has the fifth largest proportion of graduates carrying student loan debt, at 71 percent.
List of student loan debt averages at Minnesota colleges: bit.ly/WrP125
The report shows Winona State University has the highest average student loan debt among 2011 graduates, at $31,275. Minneapolis College of Art and Design graduates had the highest loan debt among private, non-profit institutions, with a $43,035 average.
The statistics likely underestimate the student loan debt crisis because they don't include most for-profit college graduates, who typically borrow more money.
But the report shows a college degree is still worth it. While 2011 college graduates faced an unemployment rate of 8.8 percent, the unemployment rate for those with only a high school diploma or GED was 19.1 percent.
"In these tough times, a college degree is still your best bet for getting a job and decent pay," said TICAS President Lauren Asher. "But, as debt levels rise, fear of loans can prevent students from getting the education they need to succeed. Students and parents need to know that, even at similar looking schools, debt levels can be wildly different. And, if they do need to borrow to get through school, federal student loans, with options like income-based repayment, are the safest way to go."
The TICAS report also cites studies that found more than one-third of recent graduates were in positions that did not require a degree.
Some estimates show student loan debt has surpassed $1 trillion nationally, and recent government figures show nearly 10 percent of borrowers of federally-subsidized student loans had already defaulted within two years of starting repayment.
President Obama instituted an income-based repayment plan that caps federal student loan payments at 15 percent of income and forgives repayment after 25 years.
But Republican challenger Mitt Romney call that plan flawed, instead proposing a shift of student aid away from the federal government toward private lenders, which he thinks are more cost-effective.
"Increasing student debt in a weak economy can be a knock-out blow to many considering college," said Rich Williams, higher education advocate with U.S. Public Interest Research Group, which advocates for students. "As our economy is recovering, lawmakers must send every signal that college is a good investment."
OTHER TICAS REPORT HIGHLIGHTS
-Private (non-federal) student loans, which generally have weaker borrower protections but have been diminishing as a source of student borrowing, accounted for about one-fifth of the debt owed by the Class of 2011.
-Debt levels vary widely by state, ranging from $17,250 in Utah to $32,450 in New Hampshire.
-Debt at individual schools ranged from $3,000 to $55,250 though not all schools report that data.
-Among colleges, the percentage of graduates with debt ranged from 12 percent to 100 percent. At 64 schools, more than 90 percent of student graduated with debt.
View data for all states at www.projectonstudentdebt.org/state_by_state-data2012.php
Information from The Associated Press was used in this report
