Newly published analysis by the Institute for College Access & Success (TICAS) of the Class of 2020, which used data from U.S. Department of Education's National Postsecondary Student Aid Study, noted that borrowers in D.C., Delaware, and Connecticut had the highest levels of average debt for the 2019-20 academic year.
The report also found a rapid increase in the use of private student loans.
"Despite flattening levels of student loan debt in recent years, the debt of graduating classes has remained near an all-time high, and the debt borrowers hold continues to make their lives financially perilous," Sameer Gadkaree, TICAS president, said in a statement.
Gadkaree added that given "pre-existing economic disparities and vast racial disparities in wealth accumulation in our country, the students who suffer most from these disruptions tend to be BIPOC, first-generation, and those from low-income backgrounds."
The highest-debt states were New Hampshire, followed by Delaware ($39,705) and Pennsylvania ($39,375). Low-debt states were primarily in the West — Utah ($18,350), New Mexico ($20,868) and California ($21,125). The share of graduates with debt ranged from 39% in Utah to 73% in South Dakota.
Private debt rising 'rapidly'
The TICAS report also noted that the private student loan market has increased "rapidly" from $92.6 billion in 2014 to $136.3 billion in 2021. Private student loan debt is around 8% of all undergraduate and graduate debt.
That's a risky move, the authors stated, because private loans "are one of the riskiest ways to pay for college" since they don't have federal consumer protections or repayment options. For instance, private loan borrowers can't qualify for Public Service Loan Forgiveness.
The states with the highest average private student loan debt were largely similar to the overall numbers, indicating the outsized financial burden brought by privately-held debt.
Aarthi is a reporter for Yahoo Finance. She can be reached at firstname.lastname@example.org. Follow her on Twitter @aarthiswami.