In early December, the Project on Student Debt (“Project”) published its annual report on the average amount of student loan debt taken out by 2012 college graduates. It found that last year, graduates left school with $29,400 in loans on average, up from $26,600 in 2011. The Project calculates that graduate student loan debt levels have been rising at a six percent rate annually, but graduates’ incomes clearly have not, raising the possibility that student loan debt will contribute to New York bankruptcy filings in the future.
As for our state, there is some good news. Sixty percent of New York college graduates in 2012 had only $25,536 in student debts on average, down from $25,581 and below the national average. Compared to other states, the New York ranked in the middle, but the range isn’t that large: Delaware came in at number one with $33,649 and New Mexico was at the bottom with only $17,994.
The Project’s Web site provides data from the individual colleges and universities in each state that participated. Looking through some of the New York schools, most of the CUNY branches’ graduates finished with $20,000 or less in debt (sometimes much less), and the SUNY branches reported average graduate debt levels ranging from $15,000 to $30,000. Graduates from New York University, which is known for its high tuition costs, left with $35,104. Columbia University did not submit any data, and the Project did not gather data from any for-profit colleges.
Although New York college graduates are leaving school with less debt than the national average, the Project’s findings do not include graduate school debt or debt levels for non-completers. Using data from a sample of credit reports from the credit bureau Equifax in late 2012, the New York Federal Reserve published a chart of average student debt levels per borrower. According to the Fed, New York student debtors owe on average between $26,000 and $28,000, putting it in a second tier below Washington D.C. and Maryland. The national average was $24,810, and it’s likely that many of the people with very high student debt levels live in New York, though it should be noted that having debt and having difficulties paying it aren’t the same thing. Indeed, the same Fed report indicates that New Yorkers are more likely than residents of other states to have student loans but are less likely to fall behind on them.
The bad news is that in 2013, the 90-day delinquency rate on student loans spiked above ten percent, meaning many debtors are unable to repay their student loans. If this describes your situation, it’s worthwhile to sit down and talk with a bankruptcy lawyer to explore your options. Often a chapter 7 bankruptcy can free up funds for student loans, and chapter 13 can halt collections proceedings with its extended automatic stay.
For answers to more questions about student loans, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced New York bankruptcy Bruce Weiner for a free initial consultation.