Student Loan Debt Us – It’s the fastest growing debt in America – student loans.1 Currently, student loan debt is at an all-time high of $1.58 trillion, and nearly 45 million Americans currently have student loans.2, 3 Wow! In fact, most students (65%) graduate with student loans. 4, and the average student loan debt per borrower is $38,792, with an average monthly payment of $393.5, 6
This is a quick look at what’s happening with student loans in America today. But keep reading for the latest, in-depth research on student loans:
Student Loan Debt Us
There are two types of student loans: federal and private. As of January 2022, 43.4 million borrowers have federal student loans — meaning their loans are funded by the U.S. Department of Education. 7 In fact, more than 90% of student loans are federal and fall under three main federal loan programs: Direct loans, Federal Family Education Loans (FFELs), and Perkins loans.8
Student Loan Debt Statistics [2024]: Average + Total
The FFEL program was the first federal student loan program created in 1965. Although the program was terminated in 2010 (meaning no new loans have been issued since then), borrowers still owe a total of $230 billion in FFEL program debt. Now, all new federal student loans come from the Direct Loan program. There are three types of Direct Loans: Direct Subsidized Loans (FFSA based on financial need), Direct Unsubsidized Loans (no proof of financial need), and Direct PLUS Loans (a student or parent takes out a loan to fill the cost gap after running private loans).
Here’s a breakdown of the amount owed and the number of borrowers for each major type of federal student loan:10
Federal loan interest rates change over time and vary depending on the type of loan and the payoff date (ie, the date the money is given to the borrower). The only exception is Perkins loans – they have a fixed rate of 5%.
Currently, federal student loans have a temporary 0% interest rate because of the CARES Act. But once it ends, interest rates on direct loans issued between July 1, 2021 and July 1, 2022:11
Student Debt Fights Hit Home: ‘i’m In Limbo’
The pandemic has certainly affected many things, including the student loan industry. Due to the CARES Act, federal student loan payments have been suspended as of March 2020. But they are due to resume on September 1, 2022.
The good news is that interest doesn’t accrue while those payments are pending, so it’s a good time to throw money at federal loans because they go straight to the principal! But not everyone takes advantage of the situation. As of the first quarter of 2022, this is the current balance of federal student loan debt (including Direct Loans and FFEL program loans held by the Department of Education).12
Although only 1% of federal student loan accounts are in active repayment, it’s unclear how many people have continued to make payments on their student loans during the pandemic. But our 2022 Personal Finance Study found that 6 in 10 people with student loans have defaulted on their debt.
Payments on their loans when payments stop during the pandemic. That means the end of student loan relief is a rude awakening for most people.
Percent Change In Average Student Loan Debt, By State U.s. 2020
) come from a bank, credit union, state credit institution or other type of financial institution. Private student loans tend to be more expensive—with interest rates as high as 14.18%.13 As of January 2022, private loans accounted for 8.4% of total student loan debt, but the national private student loan outstanding is still more of 140 billion dollars. 14
So if 45 million Americans are carrying student debt, let’s talk about how they’re paying it off (or not).
It takes Americans an average of 20 years to pay off their college loans, although it can take 45 years or more. Their loan balance will grow over the first 5 years
What does it look like in real life? Well, if you make an average monthly payment of $393 on a $38,792 student loan at 5.8% interest, it will take you 11 years to pay it off. Plus, you’ll pay $14,052.09 in interest alone!
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Or if you took 30 years to pay off the same loan (which would be a monthly payment of $227), you would pay $43,526.30 in interest – that’s more than the original amount you borrowed! O
And if you’re wondering if student loan debt (and all that interest) is worth it, ask this: 44% of high school seniors go on to a four-year college, but only two-thirds of those students graduate. .18
19 And if you take out student loans but don’t finish your degree, you still have to pay back your loans—plus interest. Ugh.
The thing about student loan debt is that people pay for college even after they leave their alma mater. Americans between the ages of 30 and 39 carry a total of $504 billion in student loan debt, while those between the ages of 18 and 29 are not far behind with $357 billion in student loan debt. The 20 and 70+ crowd is also completely free of student loans. In fact, they owe a total of about $25 billion
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But it’s not clear whether it’s the total degree they earned later in life, the debts left over from their youth, or the money they borrowed to educate their children or grandchildren.
Fun fact: Student loans started in part as a way to produce more scientists and engineers to beat Russia in the 1957 space race. In order to increase attendance at higher education (especially in science, mathematics, and foreign languages), the National Defense Education Act of 1958 led to an increase in the number of students from 3.6 million in 1960 to 7.5 million in 1970. 22
But college attendance isn’t the only thing that’s been on the rise for decades. As mentioned earlier, student loans are the fastest growing debt in America. In fact, since the Great Recession of 2007, we’ve seen growth of about 157%. Graduate student debt is on the rise
The overall cost of living has risen over the past 30 years—with the cost of higher education rising faster than other sectors such as health, housing, and food. Since 1994, education spending has increased by more than 436%.25
Student Loans Payments Return For Over A Million Virginians
And the result will be more expensive tuition and higher living costs. . . (you guessed it) more student loan debt. Students are more tempted than ever to take out loans for their education without weighing the real costs.
Yes, these numbers can be overwhelming (especially if you’re in high school or have kids heading off to college soon)—but there’s hope. Remember 1) there are well-paying careers that don’t require degrees and 2) there are ways to get a degree debt-free even at increased cost.
These numbers show the reality of the student loan crisis, but that doesn’t mean you have to be just another statistic.
In fact, 47% of young people are delaying buying a home because of student loan debt, 21% are delaying buying a home, and 21% are waiting to get married.28
Biden’s Student-loan Forgiveness Is Unfair To Most Americans
And don’t forget the $25 billion owed by those 70 and older. In what should be the golden years of their retirement, some Americans are still saddled with student loans.
According to our quarterly survey, 71% of those who took out student loans to pay for college say they wish they had been better educated about the loan before they took it out. More than half (53%) regret taking out a student loan, and 43% of those who took out a student loan regret going to college.
. And yet, students are told what they have to do (including borrowing money) to get a degree.
Also, 22% of borrowers who graduated in the academic year 2015/16. had trouble paying student loans in his first year out of college. graduates, and 44% of graduates were employed outside the field of study.
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With so many Americans saddled with student loan debt, everyone is hoping to get their loans forgiven. But while President Biden has based much of his campaign on forgiving at least $10,000 in student loan debt for every borrower, he has yet to follow through on that promise.
To be fair, Biden has forgiven more than $15 billion in student loan debt since taking office — to certain borrowers. Closed schools and people working in the public service. And