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Paying for college isn’t getting easier, and student debt can impede borrowers’ ability to buy homes, get married or expand families. However, some options can ease the burden of student debt, including refinancing your loan to get a lower monthly rate, as well as temporary loan deferment or forbearance if you are struggling to make payments.
Here’s a breakdown of student loan debt with the most recent figures and how you can tackle it.
How much student loan debt is there?
While student debt is a crisis in the U.S, the annual growth rate of national student debt is starting to slow down. Total national student debt only increased by 1.37 percent during the fourth quarter of 2022.
Student loan debt remains the second largest form of consumer lending debt in the U.S. Currently 43.8 million borrowers in the U.S. have student loan debt, with the total outstanding federal loan debt reaching $1.77 trillion.
Key student loan debt statistics
- 43.8 million Americans have federal student debt.
- In total, the U.S. has $1.77 trillion in outstanding student debt.
- The average student loan balance is $40,114.
- Student loans are the second-largest type of consumer debt behind mortgage debt.
- 92.6 percent of student loan debt is federal, while 7.4 percent is private.
- 30 percent of undergraduate students and 66 percent of graduate students borrow federal student loans.
- Private student loans only account for 6.9 percent of outstanding student loan debt.
- Student loan debt accounts for 9.5 percent of national consumer debt and is the second largest form of consumer debt behind mortgages, which account for 70.7 percent of the total.
- Paying off student loans can take anywhere from 10 to 30 years
Nearly 60 percent of U.S. adults with student loans have put off important financial decisions due to student debt.
The U.S. student debt crisis
College costs continue to rise, causing borrowers to graduate with thousands of dollars in student loan debt. Data from the Federal Reserve shows that the total outstanding student loan debt has increased by roughly 84.8 percent since 2011.
|Year||Total outstanding student debt (in millions)|
|Source: The Federal Reserve|
The largest form of consumer debt in the U.S. is mortgage debt at $12.04 trillion in the first quarter of 2023. Student debt is the second largest form of consumer debt, followed by auto debt.
Here is a comparison of student debt and auto debt in the past 10 years:
Student loan debt and the CARES Act
The CARES Act was implemented as a way to alleviate the financial strain of the pandemic. One of the provisions was a pause on federal student loan payments and collections activities, which is currently in place.
The most recent report from the U.S. Office of Federal Student Aid (FSA) found that as of March 2023:
- Nearly 27 million Direct Loan borrowers are in forbearance status, with more than 99 percent of those balances in the CARES Act forbearance.
- Roughly $1.1 trillion of Direct Loans are in forbearance status.
- About 305,000 Direct Loan borrowers are in repayment status, opting out of the CARES Act flexibilities.
Individual student loan debt statistics
Here’s how student loan debt in the U.S. impacts individual borrowers:
- With 15.1 million people, the age group with the most student loan borrowers is the 25 to 34 age bracket, while 7.1 million borrowers are 24 years old or younger.
- About 64 percent of students seeking a bachelor’s degree from a four-year public institution have student loan debt.
- Residents of Washington D.C., Maryland and Georgia have the highest student loan debt in the country, with the average student loan debt exceeding $41,000 in all three areas.
- As of March 2023, 26 percent of borrowers owed less than $10,000 in federal student loans, and 67 percent owed $40,000 or less.
- The average in-state student at a four-year, public institution spends $27,027 for one academic year. The average private university student spends $55,840.
Student debt and mental health
Student loan debt can have a significant impact on a borrower’s mental health. Feelings of anxiety and stress may coincide with long-term debt, especially if the debt impedes the ability to meet important financial milestones, like saving for a house or buying a car.
- Taking on too much student loan debt is the biggest financial regret of 10 percent of Americans.
- 54 percent of student loan borrowers experience mental health challenges due to the amount of debt they owe.
- The financial pressure of student loan payments can lead to stress, anxiety and depression.
Federal student loan debt statistics
Federal student loans are offered by the U.S. Department of Education rather than private lenders. They’re a good first choice for any student considering student loans, and they comprise more than 90 percent of the U.S. student debt portfolio.
Student loan debt by loan type
All new loans originated by the federal government are part of the Direct Loan program: Direct Subsidized Loans, Direct Unsubsidized Loans, grad PLUS loans, parent PLUS loans and Direct Consolidation Loans. Because of this, Direct Loans make up the greatest portion of the federal student loan portfolio. However, there are still borrowers who are paying off older Perkins or Federal Family Education Loan (FFEL) Program loans.
Here’s how total loan amounts have changed for each loan type in the past three years:
|Direct Subsidized (in billions)||Direct Unsubsidized (in billions)||Grad PLUS (in billions)||Parent PLUS (in billions)||Perkins (in billions)||Consolidation (in billions)|
|Source: U.S. Department of Education|
|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||$563.5||$90.7||$105.4||$4.4||$555.1|
|2022 – Q1||$290.9||$562.5||$90.6||$104.8||$4.2||$553.3|
|2022 – Q3||$291.9||$571.5||$94.9||$106.3||$4.0||$548.7|
|2022 – Q4||$294.3||$579.3||$97.9||$108.5||$3.9||$550.6|
|2023 – Q1||$293.0||$574.1||$96.7||$107.6||$3.8||$560.3|
|2023 – Q2||$296.2||$584.9||$100.7||$111.7||$3.7||$547.3|
Student loan debt by state
The three states with the lowest student debt per borrower are North Dakota, Iowa and South Dakota; in each of these states, the average student debt per borrower comes in at less than $32,000.
The three states with the highest student debt per borrower are Maryland, Georgia and Virginia, where the average debt per student is near or above $42,000. Washington, D.C., has the highest average debt per student overall at $54,863.
The chart below summarizes each state’s total federal student loan balance, the number of borrowers and the average federal student debt per borrower as of March 31, 2023.
|Location||Federal debt (in billions)||Number of borrowers (in thousands)||Average federal debt per borrower)|
|Source: U.S. Department of Education|
|District of Columbia||$6.6||120.3||$54,863|
Private student loan debt statistics
Private student loans are offered by online lenders, banks and credit unions. While private student loans should only be taken out once federal aid potential has been exhausted, they still account for almost a tenth of student loan debt in America.
Here’s how private student loans contribute to the overall levels of student debt in the U.S., according to data from the Education Data Initiative:
- The total outstanding private loan debt balance is more than $120 billion, or 6.9 percent of the total student loan debt in the U.S.
- Undergraduate loans made up 88.7 percent of this total number, while graduate loans made up 11.3 percent.
- Less than 2 percent of private student loans defaulted in the fourth quarter of 2021.
- 13 percent of students use private student loans.
Student loan debt by degree
Advanced degrees are expensive, but the investment could pay off. Here’s what you need to know before taking out graduate student loans:
- Graduate students account for 39 percent of federal student loan debt
- The average debt for those with Master’s degrees is $83,651
- The average debt for those with PhDs is $134,797
- 60 percent of graduate students borrow federal loans
- Those who earn an advanced degree may earn a larger annual income and have increased job security.
The bottom line
Although the rate of borrowing has slowed down slightly, student loan debt still ranks as the second largest form of consumer debt in the country. The $1.77 trillion of student loan debt carried by close to 44 million adults will have a lasting effect on borrowers’ quality of life for years to come.