Statistics on Student Loan Debt

Main Summary

Federal student loan payments resumed on October 1, 2023, after a three-year pause, while interest resumed a month earlier in September.

Some borrowers choose to postpone student loan payments for a longer time while they try to figure out how to save additional costs in their monthly budgets.

Income-driven repayment plans, deferment, and public service loan forgiveness programs are some options that borrowers can explore to deal with repayment challenges.

More than half of Americans (56 percent) agree that the cost of higher education has become out of control. This may be why many have had to rely on student loans over the years to bridge financial gaps when there was a lack of other forms of support.

So far, over 43 million Americans hold federal student loans, with a total balance exceeding $1.7 trillion. With the resumption of federal student loan payments, many Americans still struggle to find room for this bill in their monthly budgets. Fortunately, there are some available options that can make payments more manageable.

Key Statistics on Student Loan Debt

Student loan debt is a national crisis affecting millions of Americans. Although the Department of Education has led efforts to address this issue in recent years, rising education costs make it challenging for many to afford college without loans.

Education

As of June, 43.6 million Americans had federal student loan debt, with an average balance of $38,000 per borrower.

With a total balance exceeding $1.7 trillion, student loans are the second-largest type of debt accrued by consumers after mortgages, making up 9 percent of the nation’s consumer debt.

54 percent of college students graduate with student loan debt.

The average college student borrows $29,100 to cover their education costs.

More than 2 in 5 Americans (44 percent) believe students are not adequately educated about the financial implications of borrowing before taking out loans.

How Much is Student Loan Debt?

Student loan debt is the second largest form of consumer debt in the United States, impacting over 43 million Americans. However, as college costs continue to rise, public concern grows regarding students’ ability to afford college and the need for loans to fill gaps.

According to Bankrate, about half of student loan borrowers believe that the cost of higher education is too high, and more than a third (34 percent) of them say that students are not fully aware of the negative consequences that borrowing can have before taking out loans.

Yet while 32 percent of Americans feel that student loan debt is a national crisis, 30 percent believe that – despite not knowing enough about loans at the time of borrowing – borrowers should repay their debt in full.

The Student Debt Crisis in the United States

Data from the Federal Reserve indicates that total student loan debt outstanding has increased by an estimated 52 percent since 2013.

Year

Total Student Debt Outstanding (in millions)

2013

1,145,550.75

2014

1,235,751.47

2015

1,320,248.14

2016

1,405,332.16

2017

1,488,895.48

2018

1,566,903.43

2019

1,637,880.71

2020

1,693,860.24

2021

1,733,415.18

2022

1,764,067.41

2023 (to date)

1,737,181.66

Source: Federal Reserve

Student debt is the second largest form of consumer debt, representing nine percent of household debt in the nation as of the third quarter of 2023.

Student Loan Debt and the End of Payment Pause

On June 30, 2023, the Supreme Court blocked the Biden administration’s student loan relief plan, which would have canceled up to $20,000 of federal student loans for borrowers who met specific criteria.

The decision led to

The Supreme Court also ruled to extend the administrative payment pause for three years on federal student loans. This decision sparked mixed feelings.

On one hand, nearly one-third of Americans (31 percent) believe that the federal government has not provided enough financial support to borrowers, while 17 percent believe that the government has provided “too much” assistance to borrowers.

Student Loan Debt and the CARES Act

The CARES Act was implemented as a way to alleviate the financial pressure caused by the pandemic. One provision halted payments on federal student loans, which ended on October 1, 2023.

“Before the pandemic, tens of millions of borrowers and their families were burdened by massive and unmanageable student loan balances,” says Ella Azulay, a research and policy analyst at the Student Borrower Protection Center (SBPC).

“While it is known that the student debt crisis is a barrier preventing borrowers from achieving financial stability and other milestones, such as homeownership, the payment pause helped borrowers improve their credit scores and avoid default,” she adds.

However, borrowers still facing difficulties are not out of luck. The Department of Education has implemented a 12-month “on-ramp” transition period, which will prevent servicers from reporting missed payments to credit bureaus or placing borrowers who miss payments into default until September 30, 2024.

Student Loan Repayment Plans

While there is no plan for broad student loan forgiveness, there are some options that can help you keep your accounts in good standing and make payments affordable.

Key Terms

Fixed payment plans: These include standard, graduated, and extended repayment plans. They are repaid over 10 to 30 years, depending on the plan, and your monthly bill depends on your outstanding balance, repayment term, and interest rate.

Income-driven repayment plans: These include the Saving on a Valuable Education (SAVE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) plans. With these plans, your payments depend on factors such as your income and family size and can be as low as $0.

Public Service Loan Forgiveness (PSLF) program: Through the PSLF program, you can have the remaining balance of your federal student loan forgiven after making 120 qualifying payments. To qualify for this program, you must work full-time for a qualified nonprofit organization or be employed by a federal, state, local, or tribal government agency and be enrolled in an income-driven repayment plan.

Individual Student Loan Debt Statistics

Here’s how student loan debt in the United States impacts individual borrowers.

Education

24 percent of millennials have student loan debt.

About 64 percent of students pursuing a bachelor’s degree from a four-year public institution have student loan debt.

34 percent of borrowers owe $10,000 or less in federal student loans, and 79 percent owe $40,000 or less.

The average student in a public four-year institution spends $26,027 for one academic year. The average student in a private university spends $55,840.

The average student borrower takes 20 years to repay their student loans.

Student Debt and Mental Health

47 percent of Americans who say their mental health has been negatively affected by financial worries cite debt as the main reason. Just like any other type of debt, student loans can significantly impact a borrower’s mental health, increasing anxiety and pressure.

According to

In a survey conducted by ELVTR, 54 percent of participants reported mental health issues related to student debt, including the following:

56 percent reported experiencing anxiety.

32 percent suffer from depression.

20 percent have sleep problems.

17 percent reported panic attacks.

Additionally, 10 percent of participants said they have other mental health issues not mentioned above.

Federal Student Loan Debt Statistics

Federal student loans are provided by the U.S. Department of Education as opposed to private loans. They are the primary good option for any student considering student loans, constituting over 90 percent of the student debt portfolio in the United States.

Student Loan Debt by Loan Type

All new loans established by the federal government are part of the Direct Loan program: Direct Subsidized Loans, Direct Unsubsidized Loans, Graduate Loans, Parent Loans, and Direct Consolidation Loans. As a result, Direct Loans make up the largest share of the federal student loan portfolio. However, there are still borrowers repaying older Perkins loans or Federal Family Education Loan (FFEL) Program loans.

Total Loan Amounts by Loan Type Over the Past Three Years

Direct Subsidized Loans (in billions)

Direct Unsubsidized Loans (in billions)

Graduate Loans (in billions)

Parent Loans (in billions)

Perkins Loans (in billions)

Consolidated Loans (in billions)

2020 – Q1

279.6

516.3

75.3

95.6

5.9

542.4

2020 – Q2

282.9

528.5

78.8

99.4

5.6

547.7

2020 – Q3

282.3

529.1

79.5

98.3

5.4

550.2

2020 – Q4

285.7

539.8

82.8

100.8

5.2

552.1

2021 – Q1

285.2

539.4

82.7

100.3

4.9

552.6

2021 – Q2

289.8

552.7

86.3

103.6

4.7

554.7

2021 – Q3

288.7

553.5

87.3

102.8

4.3

554.5

2021 – Q4

291.5
Source: https://www.aol.com/student-loan-debt-statistics-022310961.html