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NEW YORK The 8.8 percent unemployment rate among recent college graduates was front and center during the second Presidential debate on Tuesday night. Here's another factoid the candidates could have used to bolster their arguments - the average student who graduated in 2011 has $26,600 in student debt, according to a new report from The Institute for College Access & Success (TICAS).
The highest-debt state is New Hampshire, with an average of $32,440 per student, the report says. It is followed by Pennsylvania, Minnesota, Rhode Island and Connecticut. Most of the schools in the top 10 are along the Northeast Corridor or in the Midwest, according to the study.
The lowest debt state is Utah, with an average of $17,227 per student. It is followed by Hawaii, California, Arizona and Nevada, with the bulk of the low-debt states in the South or West.
The national student debt average, up five percent from $25,250 last year, could have been much higher and it might get much worse, cautions Mark Kantrowitz, publisher of FinAid.org, an education financing website.
That's because averages in the "Student Debt and the Class of 2011" report are derived from the voluntary reporting by 1,057 four-year, non-profit colleges of student debt at graduation, Kantrowitz notes. Few for-profit college report these figures, so the debt loads of students at these schools are not included, pushing the figures down.
For-profit colleges typically have a higher rate of borrowing by students at higher amounts, Kantrowitz says. Data are also spotty from high-cost colleges, where students typically take out large amounts in private loans.
Several federal Stafford and Pell loan limits were raised in 2008 - as well as at the state and institution level - when 2011 graduates were still in school. The loan limits rose to help families hit by the recession pay soaring tuition. As a result, students needed fewer costly private loans, lowering the average debt, Kantrowitz adds.
In addition, institutions also rolled out more need-based and other aid during the recession, according to the Sallie Mae study "How America Pays for College 2012.
But there has been no government action since 2008 and loan ceilings have remained the same, even though tuition costs have skyrocketed to an average $160,000 at a private school, according to the College Board. Students now have to make up the difference with private loans, Kantrowitz says.
While there are proposals to increase federal aid to keep pace with rising tuition costs - also discussed in the Presidential debate - nothing will be immediate, Kantrowitz says.
Kantrowitz forecast a surge in private student loans in the coming years if the government does not raise the ceilings.
Lauren Asher, president of The Institute for College Access & Success, cautions that a growing reliance on private student loans is detrimental for students because these loans are much more risky and fraught with servicing problems than federal loans. Private loans are not guaranteed by the government and there are not the same kind of options for managing your debt, she says.
As detailed in a recent report from the Consumer Finance Protection Board, students have many complaints about dealing with private lenders such as being denied loan consolidations, getting bad or confusing repayment information, not having payments count along with other customer service issues. In a news conference, the CFPB ombudsman repeatedly compared the private student loan industry to the pre-bust mortgage servicing industry.
Both Asher and Kantrowitz agree that schools need to provide a clearer picture of actual student debt, with 100 percent participation in data collection - not the current 53 percent.
"We need debt at graduation collected at every college and publicly reported so people have a better sense of what's happening," Asher says. (Follow us @ReutersMoney or here. Editing by Lauren Young and Andre Grenon)