Average Debt for Class of 2020 Varies Widely by State and College; Private Student Loans Drive Up Debt Loads in High-Debt States

Oakland, CA – Student Debt and the Class of 2020, TICAS’ sixteenth annual report on debt for bachelor’s degree graduates of public and nonprofit colleges, finds vast variation in debt levels across states, as well as colleges. Average student debt at graduation in 2020 ranged from $18,350 in Utah to $39,950 in New Hampshire, and new graduates’ likelihood of having debt varied from 39 percent in Utah to 73 percent in South Dakota. In nineteen states, average debt was more than $30,000, and it was over $35,000 in six states.

Many of the states with high average overall debt amounts also had higher average private debt. Eight states were in the top 10 for both average private and overall debt (including federal, private, state, and institutional debt). Those with more private loan borrowing and high average private debt levels were concentrated in the Northeast, while states with less private debt were concentrated in the West.

“Despite flattening levels of student loan debt in recent years, the debt of graduating classes has remained near an all-time high, and the debt borrowers hold continues to make their lives financially perilous,” noted Sameer Gadkaree, TICAS president. “Given pre-existing economic disparities and vast racial disparities in wealth accumulation in our country, the students who suffer most from these disruptions tend to be BIPOC, first-generation, and those from low-income backgrounds.”

The Unfolding Impact of COVID-19. In 2020, the COVID-19 health pandemic suddenly and profoundly disrupted all aspects of students’ lives. Time, and new data, will tell the full impact of the COVID-19 health crisis on students’ abilities to access and complete college, as well as their accompanying debt burdens, but early trends in enrollment signal concern that the crisis has exacerbated existing inequities in access to quality, affordable higher education.

“While historic levels of public investment in both federal safety nets and emergency aid for students and colleges helped to lessen the blunt of the economic impact of the pandemic for many, financial supports have not addressed long-term downward trend in funding for public higher education, as well as persistent inequities that predated the crisis,” said Oliver Schak, TICAS research director and report co-author. “Although emergency financial aid funds provided by the federal government and distributed by institutions helped mitigate some of these disruptions, basic needs insecurity remained a major obstacle for too many students.”

Nonfederal Loan Usage. The burden of student debt is not just about how much debt students have, but also about what types of loans they have. Private loans — those made by banks and other private lenders — are one of the riskiest ways to pay for college. They typically cost more than federal loans and do not guarantee the same consumer protections or repayment options as federal loans.

The percentage of 2020 graduates with private loans ranged from three percent in Utah to 27 percent in North Dakota, and the number of graduates with private debt exceeded 15 percent in 10 states, including six in the Northeast, three in the Midwest, and one border state in the South. Students who attend nonprofit colleges and universities are also more likely to graduate with private debt, and leave with higher debt amounts, as compared to those who attend public colleges and universities. The share of graduates with private debt exceeded 15 percent at 245 out of 633 (39%) nonprofit institutions, compared to 89 out of 403 (22%) public institutions. The average private debt borrowed exceeded $50,000 at 92 (15%) nonprofit institutions, compared to only three (less than 1%) public institutions.

Policy Recommendations. Student Debt and the Class of 2020 includes federal policy recommendations to reduce debt burdens and manage repayment in the wake of COVID-19 and beyond. Even before the pandemic, too many student loan borrowers were struggling to repay their debt, and if COVID-19 emergency federal benefits end in early 2022, many borrowers may still be facing pandemic-related economic hardship. The Education Department must make a robust plan to ensure borrowers will be protected during such a transition.

The report also calls on Congress to fund public colleges sustainably and equitably, strengthen protections for students who borrow private student debt, and protect access to federal student loans.

NOTE: This year’s report does not include national figures for the share of the Class of 2020 with debt, or their average debt. The best available national average comes from a nationally representative federal study that is typically released every four years by the U.S. Department of Education (the National Postsecondary Student Aid Study, or NPSAS), which is based on a large, nationally representative sample of students. The next set of NPSAS data will cover students who graduated in the Class of 2020 – the same group of students covered in this report – but the data are not expected to be available in 2021.

The full report and companion interactive map with details for states and more than 1,000 colleges are available online at ticas.org/interactive-map.

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The Institute for College Access & Success is a trusted source of research, design, and advocacy for student-centered public policies that promote affordability, accountability, and equity in higher education. For more information see www.ticas.org or follow us on Twitter and Facebook.