Student Debt Up, But Borrowers Now Have More Options

Average Student Debt Climbs to $26,600 for Class of 2011
Important Developments for Student Loan Borrowers
CFPB Reports on Private Student Loan Complaints and Obstacles for Military Borrowers

Average Student Debt Climbs to $26,600 for Class of 2011

Report, website include state-by-state and campus-by-campus debt levels for 2011 graduates

TICAS recently released Student Debt and the Class of 2011, our seventh annual report on the debt carried by new college graduates. Hundreds of news outlets around the country have already run stories featuring our findings, including The New York Times, USA Today, and PBS NewsHour.

We found that two-thirds of college seniors who graduated from public and private nonprofit four-year schools in 2011 carried an average of $26,600 in student loan debt, up 5% from the previous year. Private student loans comprised about one-fifth of the Class of 2011's debt. Meanwhile, unemployment for recent graduates dipped from last year's peak of 9.1% but remained high at 8.8% (still less than half the unemployment rate for young adults with only a high school diploma).

The report also shows that average student debt levels vary widely by state as well as by college. To view debt levels for all 50 states plus the District of Columbia and more than 1,000 individual U.S. colleges and universities, visit our companion interactive map.

Read the press release

Read the report

Use the interactive map

Important Developments for Student Loan Borrowers

New Federal Rules Improve IBR and Create Pay-As-You-Earn 

Last week, the U.S. Department of Education issued final regulations creating the new Pay-As-You-Earn repayment plan, improving the current Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) plans, and simplifying the process for discharging federal student loans in cases of total and permanent disability. The new Pay-As-You-Earn plan will provide additional repayment relief to recent graduates, who are entering the job market with record student debt and facing near record unemployment rates. To be eligible for Pay-As-You-Earn, borrowers must have taken out their first federal student loan after September 30, 2007 and at least one after September 30, 2011. The Department will publish a separate Federal Register notice to announce when Pay-As-You-Earn will become available to borrowers. 

Read our statement on the new rules

New Online IBR Application and Renewal Process

Earlier this year, the White House announced it would streamline the application process for the Income-Based Repayment (IBR) plan for federal student loans. We're happy to report that the new online application tool is now available! Whether first applying for IBR — or already enrolled and needing to update income information — this new tool will make it much easier for borrowers to keep their loan payments manageable.

For more information and to use the online IBR application and renewal tool, visit Studentloans.gov.

IBR Enrollment Tops 1 Million, But More Outreach Needed

According to recent reports, at least 1.1 million borrowers are now enrolled in IBR! But many more are missing out on this important way to lower their payments and avoid default.  As TICAS president Lauren Asher noted in Inside Higher Ed, "There's no question that much more outreach is needed so that borrowers at all stages of the repayment process are aware of IBR." Recently, a dozen members of Congress drove this point home in a letter urging Education Secretary Arne Duncan to do more to raise awareness of IBR and related programs, including reaching out to at-risk borrowers such as those who've fallen behind on payments or been in forbearance for more than 60 days.

CFPB Reports on Private Student Loan Complaints and Obstacles for Military Borrowers

The Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman released its first annual report on consumers' private student loan complaints, as required by Congress. In less than seven months, private student loan borrowers submitted nearly 3,000 complaints to the CFPB, the vast majority about problems with loan servicing — from unauthorized payments and high fees to the lack of options for borrowers in financial distress. In some cases the complaints process led to monetary relief for borrowers; of reported amounts, the median was $1,572 and the highest was $83,000.  According to the ombudsman Rohit Chopra, "student loan borrower stories of detours and dead-ends with their servicers bear an uncanny resemblance to problematic practices uncovered in the mortgage servicing business."

The CFPB also released a report on obstacles facing service members who try to learn about and use the student loan benefits they qualify for under federal law. The Next Front: Student Loan Servicing and the Cost to Our Men and Women in Uniform draws on complaints from service members with private and federal loans.