For the first time ever, student loan debt in 2011 outweighed the amount of credit card debt in the United States, and many economists are predicting recent college graduates will be paying on those loans until their own children are set to go off to college. About two-thirds of graduates with a bachelor’s degree had debt, with the average student in the Class of 2010 owing $25,250, according to the Project on Student Debt, a national organization that tracks the level of student debt across the country. That’s a 5 percent increase from 2009, the organization said. And, in an economy that has fewer jobs even for those with specialized skills, many of those graduates are having a hard time figuring out a way to pay back that debt and also start a career or a family. Peter Holloway, senior vice president for Hazlett, Burt and Watson in Wheeling, said solving the debt problem is not something that can be done overnight. “There are no easy answers,” he said. Not much can be done to help alleviate the debt, Holloway said, because the agreement between the borrower and lender is fairly straightforward. “It shouldn’t be something that came as a surprise,” he said. “It sounds harsh, but if you borrowed it, you owe it.” Because of that, Holloway said it is important to read and thoroughly understand what the terms of the loan are before signing. He also advised that students be reasonable and weigh all possible outcomes for after college. Holloway said the problems created could include recent graduates not being able to get home loans or other financial help they may need to help them begin their life after education. He added those individuals would also likely have less disposable income to spend, which could have an effect on the economy as a whole. ‘‘With the economy right now, there are few jobs available and most people assume they have a job at the end of college,’’ he said. ‘‘It creates a crux of problems.’’ Compounding the problem is that college costs continue to soar. Most public institutions increase tuition by 5-7 percent per year, and living away from home during college has become an increasingly expensive proposition. One local resident whose daughter attends West Virginia University said he and his wife pay about $700 per month in rent for a one-bedroom apartment in Morgantown. On top of that are food costs, transportation and then just every day spending money for a young adult. The Project for Student Debt, in its “Student Debt and the Class of 2010 Report, issued late last year, found that the states with the highest average debt for 2010 graduates are all in the Northeast and Midwest, while states with the lowest debt are concentrated in the West. New Hampshire had the highest average debt at $31,048, according to the report, followed by Maine at $29,983. Utah and Hawaii had the lowest average debt at $15,509 and $15,550, respectively. The average student loan debt in West Virginia is $23,678, while Ohio had average student loan debt of $27,713 and Pennsylvania, $28,599. “Student debt continues to rise, but debt levels vary tremendously from school to school and state to state,” said report author Matthew Reed. “Nationally, two-thirds of the Class of 2010 entered a tough job market with debt averaging $25,250, up from $24,000 for the Class of 2009. Some thought the jump would be even higher because of the economic downturn, but increased grant aid helped at least partially offset lower family incomes and higher tuitions while the Class of 2010 was in school.”
With student loan debt becoming the largest source of debt in the United States, some economists are concerned the overall economy could be affected.