College debt highest among N.H. students.

New Hampshire college graduates are leaving school with the highest level of education-related debt in the country, according to the Berkeley nonprofit group Project on Student Debt.

According to the data reported by 1,400 college students from four-year colleges and universities across the country, the average overall student debt of New Hampshire's 2005 graduates was $22,793.

Graduates of New Hampshire's state universities left school with $21,469 in student debt, while graduates of the state's private institutions graduated with average debt totaling $24,672.

Graduates from throughout the New England region all ranked high for overall student debt. Rhode Island ranked fourth, with average student debt of $20,798; Maine was seventh, with average debt of $20,239; Vermont ranked 11th, with debt of $19,482; Connecticut ranked 12th, with debt of $19,440; and Massachusetts was ranked 21st, with average student debt of $18,169.

According to Ingrid Lemaire, vice president of research and government relations for New Hampshire Higher Education Assistance Foundation Network Organizations, the number of private schools located in New England, coupled with the higher cost of living, contribute to the survey's findings.

"New England has traditionally had a higher number of private schools, and it's also an expensive region of the country. Everything from building maintenance to heating costs more," Lemaire said. "And in New Hampshire we don't have as many students on a percentage basis going to public schools."

According to the report, the average debt level of graduating students varies greatly from state to state, from New Hampshire's high to Utah's low of $11,709.

Financial aid policies and tuition rates are only two of the variables contributing to the differing debt levels.

As far as state aid goes, New Hampshire ranks among the lowest in the country with $3.2 billion earmarked for higher education.

Student income profiles, institutional aid, locale of institutions, availability of low-cost community colleges and their transfer policies, local cost of living, local wage levels of working students and length of time needed to complete degree requirements all play into the overall debt assumed by area students.

Statewide averages were calculated using individuals' school reports of the total federal and private student loans taken out by college seniors while attending the institution. Prior borrowing by transferring students or private loans were not included in the study.

NHHEAF loan default rate among nation's lowest

Even while the national student loan default rate increased, the New Hampshire Higher Education Assistance Foundation, which guarantees the state's student loans, was able to maintain one of the six lowest student loan default rates in the nation for the seventh year in a row.

According to the U.S. Department of Education, for fiscal year 2004 the national average student loan default rate rise to 5.1 percent, from 4.5 percent for fiscal year 2003. NHHEAF's default rate was steady, at 2.8 percent.

The default rates measure the percentage of borrowers who enter repayment of their loan in a given federal fiscal year and default on their loans by the end of the following fiscal year.

NHHEAF has maintained a cumulative net default rate of less than 4 percent for almost all of its 44-year history, said Rene A. Drouin, president and CEO.

He said NHHEAF invests significant resources to spare student and parent borrowers the severe consequences of default. Its default aversion team works quickly to develop working relationships with borrowers to help them manage their loan debt. The team also works closely with New Hampshire colleges and universities to stress default prevention strategies.

According to Drouin, defaulting on a student loan can have consequences for both the student and for the postsecondary institutions involved. If a student defaults on his/her loan, he/she cannot receive any more financial aid, his/her credit rating can be hurt and tax refunds and wages can be offset to cover the debt.