California Ranks Low For College Debt, But Many Students Still Struggle With High Cost Of Living

California undergraduate students from the class of 2020 have among the lowest debt of any students in the country, according to The Institute for College Access and Success's annual student debt report.

The average student loan debt for Californians who graduated with a bachelor's degree last year was $21,125 dollars. Average debt at graduation was lower in just two other states, Utah ($18,344) and New Mexico ($20,868), according to the report.

New Hampshire graduates had the highest average student debt, at $39,928.

California also had the fifth lowest percentage of total 2020 graduates with debt — 46% — compared with a high of 73% of graduates in South Dakota and a low of 39% in Utah.

Report co-author Oliver Schak said there were several reasons why California ranks low on student debt despite the state's high cost of living, including the state's strong and relatively well-funded public universities. Eighty percent of the 2020 California graduates captured in the report attended public universities, while just 20% attended private nonprofit schools, where cost and debt are often higher.

California also has relatively generous financial aid programs. "Perhaps the most important factor, and what's unique to California, is the Cal Grant," Schak said. Cal Grants are awarded to low-income students and pay full tuition at University of California and California State University schools.

Debt By School In California

Debt varies widely from school-to-school in California, ranging from $5,738, on average, for 2020 graduates of Chico State to $26,147 for the CSU Maritime Academy in Vallejo, among public schools. Maritime Academy graduates also had the highest amount of debt from private, rather than government, loan providers — an average of $37,959.

San Francisco State University had the lowest percentage of graduates with debt, 27%, of any four-year school.

Among private universities in California, 2020 graduates of the University of La Verne had the highest average debt, $51,282, while Vanguard University of Southern California had the lowest, $10,936.

Stanford University had the lowest percentage of 2020 graduates with debt of any private school, 16%.

Still A Lot Of Debt

Despite California's relatively enviable nationwide ranking on student debt, the percentage of college graduates with debt and the average amount of debt per student have risen significantly in the last few decades. So has the cost of living.

Many students, including middle-income students like Brendan Rooks, struggle to keep up with expenses. Rooks, a senior at UC Riverside and government affairs coordinator for the nonprofit Student Debt Crisis Center, said he did everything he could to keep his student debt low — including working a full-time job pretty much all through college.

"But I've still had to take out loans. So, right now I have over $10,000 in student debt," he said.

Rooks said he plans to go to graduate school, where that debt is likely to mount.

He said he wishes he had gotten better information about how to navigate financial aid and scholarships.

"As 17- and 18-year-olds making financial decisions, you don't know what you don't know," Rooks said. Especially, he added, if you have parents who are hands-off or didn't go to college themselves.

Debt Repayment Restarts February 1

After pausing repayment on student loans during the pandemic lockdown, the federal government is set to restart payments as usual on February 1. According to a recent survey from the Student Debt Crisis Center, nine out of 10 borrowers are not ready to restart payments — even though more than 68% of them are fully employed. Most cited lack of financial security as a reason.

Schak said student debt was an especially pressing concern for recent graduates and current college students "because they're graduating at a time of great uncertainty." Plus, he said, the pandemic exacerbated gaps in college affordability among racial and socioeconomic groups.

Shack said he hoped students would use the student debt data when considering schools. He also said students should look beyond a school's "sticker price," to the overall "cost of attendance," which includes living expenses and other costs beyond tuition. Most schools publish the cost of attendance on their websites.