Student debt is a serious and growing problem in the US. Many qualified young people are deterred from college by the cost, and the majority of those who graduate from college have substantial debt that can limit their career options and make it difficult to save for a home, healthcare, retirement, or their own children’s educations.

The Project on Student Debt just released its fourth Annual Report on the student loan debt of new graduates, Student Debt and the Class of 2008. The picture is grim: the new average student loan debt is $23,200, an increase of 6% over last year. The range of average student debt varies enormously among states, from the lowest, Utah, with $13,041, to the highest, District of Columbia, with $29,793.  The percentage of students graduating with debt varies from a low of 37% (Hawaii) to a high of 79% (South Dakota).

Because of data limitations, the authors warn, the state figures may understate average debt levels by as much as $5,000 and the percentage of students with debt by as many as 12 percentage points.

And for insult to injury, the unemployment rate for college graduates has been rising every quarter the last few years, to a punishing 10.6% in the 3d quarter of 2009 -- the highest on record.

 Clearly, many or most students are borrowing too much, without an accompanying study of starting salaries and expected earnings for their chosen field, and without an analysis of how long it's likely to take to repay their student loans.  Obviously, financial literacy instruction must include an understanding of principal and interest, practice comparing loans, access to current salary and employment data, and tools to create a feasible loan repayment plan. Ideally, students would receive such instruction BEFORE taking out student loans.

 Although these are sophisticated skills, with the right presentation, they are certainly within the reach of any college-ready student.