Student Loan Debt Statistics
Last Updated, 2022
In an increasingly aggressive global job market, a college education is believed to be the linchpin for students’ future success and prosperity. Indeed, it is predicted that by 2027, 70% of all employment positions in the American economy will require a college education. However, with tuition fees increasing by 8% each year, graduating with a degree has become a much bigger financial hurdle than it was generations ago.
The most recent student loan debt numbers demonstrate how severe the student loan debt problem has become for borrowers of all demographics and ages. Here’s a detailed statistical overview of student loan debt in the United States in 2021 onwards.
Total Student Loan Debt
Student loan debt, the fastest-growing debt in the U.S
Student loan debt, the fastest-growing debt in the U.S, is currently the second largest slice of household debt trailing only mortgage debt and surpassing credit card and auto loan debt.
Apparently, obtaining a four-year Bachelor’s or Master’s degree and furthering your education is sure to cost a pretty penny.
Total student loan debt over the years
- Total student loan debt is expected to exceed $2 trillion by 2024 and $3 trillion by 2038
- The total number of borrowers with student loan debt is 43.4 million
- In 2021, the percentage of bachelor students with debt is 65%
- Since 2004, the student loan debt has rocketed from $345 billion to a whopping $1.7 trillion as of Q1 2021.
The increase in debt coincides with an increase in college tuition
The rising expense of college is undoubtedly a major contributor to the expanding debt load. According to Federal Student Aid, the typical in-state student at a four-year public institution spends $14,320 without room and board fees. Private universities are considerably more expensive, with an average stated annual cost of $45,932.
It goes without saying that the increase in tuition and living costs leads students to take up even more student loan debt, creating a tremendous financial burden for Americans when they leave college and expect to land a lucrative job.
On the other hand, the average yearly income for a 2021 college graduate is $59,919 (also depending on the type of major), which implies that an average of $30,600 in debt is more than half their earnings. Instead of investing for their futures, a substantial portion of that money will go into student debt payments.
This average student loan debt is more than enough to hinder them from buying a new home, a car, paying for a wedding or even starting a business. For most young adults, these dreams are put off for years, if not decades, as they make every effort to repay the cost of their education.
Student loan debt relative to tuition fees (1993-2021)
Why does student debt continue to rise?
Cost of attendance
The average cost for a 4-year university was $553 in 1963, which represented 8.9% of the median household income of $6,200, and it was affordable for many families without putting them in debt.
The average cost for a 4-year university degree is now $16,647, which is 20.8% of the median household income of $79,900.
Millions of borrowers are taking decades to pay off loans due to income-driven repayment programs, deferment, forbearance, and default.
Longer payback terms, along with new students taking out student loans to pay for education, means an increase in student loan debt.
Private student loan needs
If grants, scholarships, and federal student loans do not cover the entire cost of attendance, many students turn to private student loans to make up the difference.
While private student loans account for a lower proportion of total student loan debt, they cost a lot more.
Student Loan Debt by Race
Historically due to disparities in income, minority groups and especially the black community, have been impacted the most by student loan debt which in turn contributes to the wealth gap. The average white 30 year old would have an accumulated wealth of $35,000 meanwhile the average black 30 year old would have $10,000 worth of student loan debt. Thus making the black community 4 times poorer than their white counterpart.
Parents of black students generally tend to have lower incomes than parents of white students. 49% of black student’s parents have a yearly wage lower than $35,000 while 69% of white students' parents have an annual income of more than $70,000.
- The student loan debt for African American Bachelor Degree holders on average is estimated at $52,000. Meanwhile black college graduates on average owe $25,000 more on student loan debt than their white counterparts.
- 48% of Black graduates owe 12.5% more in student loans than what they originally borrowed even just 4 years after graduating.
- In terms of higher education, 40% of black students have student loan debt from grad school, in comparison to only 22% of white students who have the same debt.
- While 54% of student debt in America is held by white students, black borrowers tend to struggle the most financially with a staggering 29% making $350 worth of payments every month.
Putting an income cap of $75,000 to those eligible for forgiveness could help provide relief for income groups that need it most. Especially minority groups, which generally tend to make up the majority of low income households.
A forgiveness of $50,000 would ensure the elimination of student debt for 93% low income black families.
75% of black voters and 80% of latino voters would support a concrete initiative towards forgiving student debt loans.
Student Loan Debt by State
California, Florida, Texas, and New York have the highest levels of student loan debt
Collectively, borrowers in these particular states have more than $449 billion of student loan debt which makes for 26% of the total U.S. student loan debt.
When the average student loan amounts are broken down, the amount borrowers owe vary by up to $21,000 from state to state. In 2019, borrowers in New Hampshire owed the most, with an average amount of $39,410, while those in Utah owed an average of $17,935.
Total student loan debt and number of borrowers by state (2021)
- State with the highest total student loan debt: California, $142 billion
- State with the lowest total student loan debt: Wyoming, $1.6 billion
European students also face similar issues with financing their education. The top five European countries with some of the highest tuition fees:
- Hungary - 35% of students pay tuition from €752-€13,871 per year
- Lithuania - 38% of students pay tuition from €1,073-€11,576 per year
- England - All students pay tuition from £9,876-£10,028 per year
- Wales - All students pay tuition up to £9,000 per year.
- Estonia - 21% of students pay tuition from €50-€7,200 per year.
The cost for private college differs from the cost for public college. On average for 2021-2022, the cost for private college is $38,185 as compared to $10,338 for in-state public college, and $22,698 out-of-state public college. In comparison for the UK, the average cost for in-state tuition hovers at $13,050.
Student Loan Debt by Loan Status
Borrowers who are unable to make payments can postpone them through deferral or forbearance. During these periods, interest normally accrues, however borrowers with subsidized loans do not owe the interest that accrues during deferral. The Office of Federal Student Aid has likewise suspended delinquency and deferment data for the time being.
Approximately $938.4 billion across 23 million student loan borrowers have entered student loan forbearance due to the government’s student debt relief as a result of the Covid-19 pandemic.
Student Loan Debt by Age
Gen X hold a staggering $600 billion in student loan debt
Surprisingly, those who graduated recently (25-34, 24 or younger) do not have the most student debt, even though they haven’t had much time to pay it off after graduation.
In reality, the greatest amount is owed by the 35- 49 age bracket accounting for more than $600 billion. In theory, this makes sense since interest accrues over time and borrowers choose to lower their monthly payments which in turn extends the life of their loan
Total student loan debt over the years by age (2021)
- The largest concentration of student loan borrowers is 35-49, trailing the 25-34 age group
- Surprisingly, there are 2.3 million borrowers aged 62+ who owe a total of $86.8 billion
- The amount of debt for senior citizens aged 60+ skyrocketed between 2005 and 2020, increasing from $700,000 to $86.8 billion
Student Loan Debt by Gender
Women generally have more student loan debt than men
Among those who take out loans, women, who borrow an average of $31,276, incur greater debt than men, who borrow an average of $29,270, according to AAUW.
While the amount of debt between women and men initially is not huge, after graduation, women's debt repayment collides with the gender wage gap, making it more difficult for them to repay their debts. The point at issue here is that female college graduates earn 18% less than male graduates when they start out their full-time jobs. As such, they have a harder time repaying what they owe.
Women hold about 2/3 of all
Student Loan Debt by Debt Size
Most student loan debt borrowers take $10k-$40k to pay for their education
The government limits the federal borrowing for undergraduate students who can only take $31,000 (for dependent students) and $57,500 (for those who are no longer reliant on their parents—typically those over the age of 24).
This is why the highest concentration of student loan debt is between $20,000 and $40,000, accounting for 9.6 million student loan borrowers followed by $10k – $20k owed by 9.4 million students totaling $136.1 billion.
Total student loan debt by loan size (2021)
How much time do graduates have to pay off their student debt?
Student Loan Debt by Loan Type
The majority of student loan debt comes from Stafford Unsubsidized and Consolidation loans which account for over half of the total student loan debt. The reason students opt for these two types of loan debt is that the government pays the interest while they are in school, during grace periods, and during any deferment periods.
What’s really interesting is that Parent PLUS loans account for a big chunk of all student loan debt with an increase of 66% since 2014 to 2021. The reason behind this increase is that parents seldom borrow for a single year. A parent may take several loans or take out loans for multiple children over the duration of a child's school career. As a result, cumulative balances have risen even more rapidly.
Federal and Private Loans
- Types of loans students opt for are categorized as either federal or private. About 92% of all student loans fall into the ‘Federal’ category, making it the more prominent kind. To compare, Private student loans make up only 7.89% of all student loans in America, while the cumulative private student loan debt reaches $131.10 billion.
- The average debt for students who choose one or the other differs severely, while the average federal loan debt per student is $36,510, for private loans the number is much different. The average private loan debt per student is $54,921. The interest rates for private and federal loans also differ, with federal student loans having an interest rate ranging from 4.99% to 7.54% and private student loans having an interest rate from 3.22% to 13.95%.
- Scholarships are one of the most common means to help students afford their education. However by comparison to the cost of education, the average scholarship is less significant than one might hope hovering around only $7,400.
Federal Loan Debt by level of degree attained:
- 60% of undergraduates who receive certificates owe an average of $16,940 in federal loans
- 42% of students with an associate’s degree owe an average of $21,890 in federal loans
- 63% of students with a bachelor’s degree owe an average of $31,790 in federal loans
- 54% of students with a master’s degree owe an average of $70,070 in federal loans
- 45% of individuals with a doctoral degree owe an average of $118,360 in federal loans
- 71% of individuals with a professional degree owe an average of $199,540 in federal loans
On average the private loan debt for students is roughly $54,921.
Student Loan Debt by Repayment Plan
Student loan debt by repayment type (2021)
PAYE has experienced more than 8000% increase since 2013
There are 12.4 million borrowers with $281.9 billion of student loan debt in the Standard plan which also represents the biggest share in student loan repayment.
With $194.9 billion and 3.3 million borrowers, Revised Pay As You Earn (REPAYE) is the second most popular form of student loan debt.
However, what's staggering is the fact that PAYE has gone through the ceiling experiencing an 8,361.54% increase since 2013. This includes both recipients with partial financial hardship and those without partial financial hardship.
Key takeaways: Student loan debt is an incessant problem
While the average student loan debt is already spiking at an alarming rate, with increased educational requirements for jobs as well as rising tuition costs, it only makes sense that student loan debt will only continue to swell.
Families struggle to keep up with soaring tuition costs, footing the bill through savings and investments which still proves to be unsustainable. The upshot of it all is that most students fund their education by taking out student loans, with the hope that their investment would pay off with greater salaries in the future.
Those who already have student debt should take efforts to remain on top of their payments in order to prevent defaulting, damaging their credit, and suffering other consequences. Additionally, those with student debt should learn about student loan forgiveness, debt consolidation and student loan refinance / consolidation options.