Return to the Paradox: New Jersey’s Student Debt is Getting Heavier

Our report last year on NJ student loans showed that while the state did not have as many borrowers as the bigger states (CA, TX, FL, NY), our people were carrying a heavier load.

With a look at new data, a year later, we find that the story has not changed for the better. NJ’s federal student loan debt went up over $2B to $48.43B in the 2025 dataset while the number of borrowers showed a modest increase – from ~1.2M to ~1.25M. NJ added only about 16,000 borrowers but the debt burden increased over $2B.

The state is also showing growth in the higher end of the debt bracket, with those owing $200K or more adding nearly $1.5B to the debt pot, over half of the total dollar increase from the 2024 to 2025 datasets. Folks between the $100K and $200K debt bookends added over half a billion dollars. So those two groups combined account for nearly the full increase between the two years.

In fact, when looking at the data, we find that 110,000 borrowers owe $100K or more, and these borrowers, while making up only 9% of the people in the dataset, account for almost half the debt (~45%).

So is this huge investment in degrees offset by salaries?

That is a question we looked at last year as well and, at first glance, NJ degree holders appear to earn far more than their counterparts in other states.

But as we brought up last year, you have to consider the cost of living across states for salary comparisons to be meaningful, and we can use the federal government’s Regional Price Parity measure, which compares state price levels to the national average, to accomplish this.

In this dataset, a score of 100 means a state is right at the national average. A score above 100 means the state is more expensive than average.

New Jersey’s 2024 Regional Price Parity was about 108.8, meaning prices were roughly 8.8% higher than the national average. The Bureau of Economic Analysis publishes Regional Price Parities as part of its regional price and income data.

That means New Jersey’s $80,162 earnings figure for younger college-educated workers does not have $80,162 of national-average buying power.

After adjusting for New Jersey’s higher price level, that figure is closer to about $73,700 in national-average purchasing power.

So when you work that into the numbers, the impact of the debt burden becomes clearer.

Debt rises from about 48% to about 53% of median earnings for college grads between 25 and 39 years old once New Jersey’s cost of living is factored in.

So the paradox remains: fewer borrowers but higher debt load, and the higher salaries aren’t enough to justify that load.

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