Special Report

Schools Where Graduates Have the Most Student Debt

Student debt was the only kind of household debt that increased during the Great Recession. Since then, total student debt continues to grow in the United States reaching $1.3 trillion across 43 million borrowers, greater than all other forms of household debt except for mortgage loans. Students graduating in 2015 with a bachelor’s degree owed $16,929 in student loans on average.

The amount of debt a student is likely to have upon graduation varies between schools. Using data from the Student Loan Report, a student loan news website, 24/7 Wall st. reviewed the 25 schools where students graduated with the most debt. Students of McNally Smith College of Music, a private school in St. Paul, Minnesota graduated last year with an average of $53,974 in student loan debt, the highest of any of the over 1,200 colleges and universities reviewed.

Education advocate and research organization College Board estimates that to afford tuition, room, board, and other expenses a student must budget an average of $24,061 for in-state public colleges, and $47,831 for private colleges, annually. Student loan company Sallie Mae and market research firm Ipsos conducted a study to find how families pay for college education. Most families turn to financial aid to help subsidize these high costs. In the 2013-2014 academic year, 89% of undergraduate students received some form of financial aid.

Click here to see the schools where graduates have the most student debt.

While financial aid may cover a portion of costs, generally, many sources are required to pay for the full amount. In the 2013-2014 academic year, 66% of families used grants and scholarships, which accounted for 31% of college costs. Another 30% of costs were covered by parent income and savings. Combined borrowing of students and their parents accounted for 22% of costs. The remainder of the cost came from student income and savings as well as relatives and friends.

It may seem intuitive that students of more expensive colleges graduate with more debt, but this is not necessarily the case. The 25 schools on this list are far from the most expensive ones. In fact, students of some of the most expensive schools in the country, particularly Ivy League schools, tend to graduate with the lowest amounts of student loan debt.

Harvard and Yale are more expensive than any of the 25 schools on this list, but the average student graduates with only about one-tenth of the debt. One reason for this is that many Ivy League schools have large endowments, which subsidize the cost for students with financial need. For example, the average Yale Scholarship grant was $43,989 for the 2015-2016 school year.

Since a school such as McNally Smith College of Music does not have such vast endowments from alumni, students must rely solely on traditional financial aid, savings, and student loans to cover the cost and less on scholarships and grants. When average grants and scholarships for each student are subtracted from the total cost of attendance, the effective cost of attending the 25 schools on this list tends to be higher than many more expensive schools.

Generally, one of the most important reasons students cite for going to college is the potential increase in earnings that come with a degree. While college graduates typically earn more than those without a degree, not all college graduates earn the same. The graduates of the 25 schools on this list tend to have lower earnings than most of the other schools reviewed.

This further increases the burden of their already large student debt. A McNally Smith alumni typically earns about $30,800 annually 10 years after starting their degree program. With $53,974 in student loans, the $554 monthly payment accounts for more than 20% of their pre-tax income. In contrast, a Harvard alumni typically has $4,014 in student loan debt at graduation and earns $95,500 a year.

To identify the schools where students graduate with the most student debt, 24/7 Wall St. reviewed the average debt per graduate for 1,238 colleges from the Student Loan Report, a student loan news website. The percentage of graduates with debt is also from this report. Cost of attendance and median alumni earnings are from the U.S. Department of Education’s College Scorecard for the 2014-2015 academic year. Specifically, cost of attendance refers to total cost of college, including tuition, room and board, and other expenses minus grants and scholarships received. Median alumni earnings are from tax returns for alumni who received financial aid 10 years after beginning their degree program. All data are from the most recent period available.

These are the schools where graduates have the most student debt.