Student loan debt in the U.S. is climbing to new heights -- $1.2 trillion overall, with roughly $3,000 accruing every second. In fact, the situation has gotten so bad that some companies are now offering loan re-financing as an employee benefit, alongside the more traditional 401(k)s, free snacks or maternity/paternity leave.
Some cities have it worse than others. New research from WalletHub finds that Voorhees, New Jersey and College Park, Georgia are among the cities where graduates suffer the most from student loan debt. The study divided the average debt size, based on 2015 TransUnion data, by the median annual income of residents between the ages of 25 and 44 in 2,513 cities across the nation. (In Voorhees, for instance, the ratio of student debt to income is a staggering 174 percent.)
By and large, Silicon Valley fares well--due more to high income levels than outstanding debt numbers. The San Francisco-Oakland-San Jose area boasts the highest median income of any metro area in the United States, according to the most recent available data from the U.S. Census Bureau. A surge of tech startups in recent years has helped to boost the California center's output since the economic recession. The gross metropolitan product (GMP) per capita in the Silicon Valley area was $105,482 in 2014, or more than twice the national average, according to another analysis by Bloomberg. San Jose ranked in the ninth percentile in the WalletHub study, with a ratio of debt-to-income of 32 percent, while San Francisco ranks slightly higher -- in the 25th percentile -- with a ratio of debt-to-income of 40 percent.
In spite of the fact that debt numbers are racking up, some analysts suggest that the crisis may be over-emphasized. And more debt, after all, indicates that more people are actually going to college.
"Some students borrow too much. Too many students borrow for programs that don't get them anywhere. But the impact of the outstanding debt on the economy is greatly exaggerated in much of the popular discussion of the issue," says Sandy Baum, a professor at George Washington University's graduate school of education and human development. "It is good that more and more people are going to college and most of the borrowing is productive. The alternative of people not going to college is not a good one."
It's worth mentioning that a number of alternative lenders offer inexpensive student loan re-financing services, such as CommonBond and Earnest. Such companies say they can offer cheaper rates: CommonBond, for instance, claims to save users roughly $14,000 (by using technology to evaluate a client's creditworthiness on factors beyond the traditional FICO score). Even so, average clients tend to be reasonably high-income earners.