The Bay Area has some of the best-known universities in the country. It also has some of the cities where graduates are the least burdened by student debt.
Millbrae, Morgan Hill, Sunnyvale, Fremont and San Ramon are among the top 10 cities least burdened by student debt, according to a new study from personal finance website WalletHub. Seven other Bay Area cities were in the top 1 percent for low student debt burdens, including Cupertino, Livermore and Danville.
The study compared the median student loans in 2,510 US cities with median earnings for adults 25 and older with a bachelor’s degree in those cities.
San Jose was the best-ranked large city in the Bay Area, with median student debt of $16,134 and median earnings of $74,399. That means the median student debt was about 21.7 percent of median earnings for graduates.
Coleetta McElroy, director of the Office of Financial Aid and Scholarship at San Jose State University, said she tells students to try to limit how much debt they take on during school. Money they borrow in college is money they won’t have to buy a house or a car after they graduate.
“What you’re borrowing (in college),” she said, “no, it won’t buy you a house here in Silicon Valley, but it’s a step toward that.”
More than 60 percent of students at San Jose State receive some financial aid funding, either from the university or from programs such as Cal Grants, McElroy said. Four years at San Jose State costs more than $31,000 in tuition and fees.
California over-performed in the study, WalletHub analyst Jill Gonzalez said in an email. About 250 out of the more than 300 California cities in the study were in the top half of rankings for low debt burdens, Gonzalez said.
“The large public university system could be one of the reasons for that,” she said. “It’s equally important, however, that the median earnings of bachelor’s degree holders are also above $50,000 in about two thirds of California cities, which is on the higher side.”
Danville had the highest median student debt among top Bay Area cities at $20,639. But that was balanced out by median earnings for adults with a bachelor’s degree of $98,043, according to the study.
Millbrae had the lowest median student loan debt among the top Bay Area cities at $12,730. Median earnings for degree holders in the city were $71,875. The city’s 17.7 percent ratio of median debt to median income was the fourth lowest in the country.
San Francisco was in the top 14 percent of cities for low burdens with a debt to earnings ratio of 28.6 percent. Oakland was in the top 58 percent with a debt to earnings ratio of 40 percent.
McElroy said that the California State University system, which includes CSU East Bay and San Francisco State University, is still an affordable option. But she’s worried about the other costs that come with being a student in one of the most expensive regions in the country.
“The problem I see is with the cost of living, housing, with affordability, being able to eat,” she said. The university maintains a food pantry to help students, many of which are dealing with finding a place to live.
