The workforce in New Jersey is one of the nation's most educated, but residents remain entangled in a web of financial troubles with the state's delinquent mortgage rate sitting at 10% percent. Federal Reserve Bank of New York president William Dudley made that assessment while speaking to a New Jersey crowd Thursday. By Fed estimates, the unemployment rate in Jersey stands at 9.5%, while the number of mortgages 90 days or more past due or in foreclosure hit 10% back in March. During the Great Recession, the state lost 250,000 jobs. The population of New Jersey is 8.8 million and 40% of its citizens are college graduates. Dudley calls the jobs recovery in New Jersey "sluggish," with the private sector experiencing only "moderate gains." When you add state budget cuts and a reduction in state government jobs, the employment situation continues to look grim. "Because the jobs recovery has been weak, there has been little progress in reducing unemployment," Dudley said. The median household income in New Jersey sits at about $68,000, with 9% of the state's residents living below the federal poverty line. While home prices have firmed in the past few months, borrowers are still carrying substantial debt levels. The average debt per person in New Jersey stands at $60,400, the Fed said. Dudley said without job growth, the state's housing and debt situation is unlikely to experience significant improvement. "These debt and delinquency figures, together with the weak jobs picture, suggest that New Jersey faces a number of challenges," Dudley said. "In the near term, the key issue will be to expand jobs and reduce unemployment." Write to: Kerri Panchuk.