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The Average student loan debt

Average student loan debt

The Average student loan debt

See where consumers are with average student loan debt in the US. Every year dozens of people head to college. Some see attending college as a rite of passage, while others see it as a means of obtaining higher-paying jobs; some go because they think it’s the right thing to do.

Unfortunately, not everyone can afford the cost of higher education out of pocket, especially when they get out of school is when it can be difficult to find a job that pays what they need. Also, students often have to drop out of school before earning their degree but are still hard-pressed for whatever debt they have incurred. As a result, you may find yourself in a situation with higher education bills with no income matching.

With this in mind, is it any wonder so many people are faced with payments they cannot make and delinquent debt that cannot easily erase through bankruptcy? The statistics below provide an overview of the average student loan debt situation in the US. If you are struggling and need help reducing your payments to pay off what you owe, please call at 1-844-669-4596  to connect with the help you need.

Facing a higher education

  • Only 30% of college students took out federal student loans in 2016-17. 
  • In 2016-17, only 5% of college students took out subsidized loans, only 5% took unsubsidized loans, and 20% took out loans from both programs. 
  • Nearly seven in 10 seniors (68%) who graduated from public and nonprofit colleges in 2015 had average student loan debt.

General Statistics of Average Student Loan Debt

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The Average student loan debt

Federal loans:

  • National average student loan debt is around $ 1.48 trillion.
  • The average student in the Class of 2016 has $ 37,172 in average student loan debt.
  • Number of federal student loans insured or held by the federal government as of the end of 2016: more than $ 1.4 trillion
  • Average monthly student loan payment (for borrowers ages 20-30): $ 351 (2018)
  • Total number of borrowers with federal student loans: 44.2 million 
  • Four out of five 2016 graduates with state loan debt attended schools in just four states: Texas, Minnesota, Massachusetts, and New Jersey, which awarded just 14% of bachelor’s degrees. 

For the 2021-2022 academic school year:

  • Average tuition and fees at a four-year public institution: $ 10,440
  • The average price of tuition and fees in two-year public institutions:
  • Average prices for tuition and fees at a four-year private nonprofit institution: $ 36,880 

Student Loan Interest Rate Statistics

Type of loan Rate 2019-2020 Rate 2018-19 Rate 2017-18 Rate 2016-17
Direct Subsidized Loans (Undergraduate) 4.53% 5.05% 4.45% 3.76%
Direct unsubsidized loans (Gregrado) 4.53% 5.05% 4.45% 3.76%
Direct unsubsidized loans (Gregrado) 6.08% 6.60% 6% 5.31%
Direct PLUS Loans (Graduates and Parents) 7.08% 7.60% 7% 6.31%
The Average student loan debt

Direct PLUS Loans (Graduates and Parents)

The increase in interest rates will increase your monthly loan payments by approximately 2.8%, assuming a repayment term of 10 years. (For most borrowers, that brings them an increase of a few dollars a month.)

Type of loan 10-year Treasury Note 10-year Treasury Note Limit Fixed interest rate
Federal Stafford (Undergraduate) 2.479% 2.05% 8.25% 4.529%
Federal Stafford (Graduate) 2.479% 3.60% 9.50% 6.079%
Federal Stafford (Graduate) 2.479% 4.60% 10.50% 7.079%
Federal Stafford (Graduate) 2.479% 4.60% 10.50% 7.079%
The Average student loan debt

Student Debt Default Statistics

  • 1 million borrowers default each year  
  • 40% of borrowers will default by 2023 

The average student loan debt crisis is not just a youth problem. Of the total student debt of $ 1.6 trillion in December 2020, $ 336.1 billion, or about 22%, is owed by borrowers age 50 and older. It is increased by more than five times since 2004.

A growing problem

The crisis has been harsh for households headed by older adults. In 1989, 3.1% of households headed by a person age 50 and older had average student loan debt, averaging $ 10,073. In 2016, 9.6% of households headed by someone age 50 and older had average student loan debt, and the average amount owed tripled to $ 33,053.

One of the main reasons student debt has become a burden is the combination of stagnant salaries and rising tuition costs. “In the past three decades, the cost of attending a four-year college has more than doubled, even after adjusting for inflation, as state and local funding for higher education per student has declined,” said the AARP Executive Director Jo Ann Jenkins in 2019. “Family incomes are not even close to matching that increase.”

Most of the older adults in the country got into debt because they wanted to improve their skills and get a promotion or a higher salary. Others decided to go back to school to change careers. Others borrowed money to pay for their children’s education, either by taking PLUS loans – a federal loan for parents – or by co-signing for another type of loan. 25% of borrowers age 50 and older are making loan payments because the student did not.

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Burdensome debts

According to the Federal Reserve, the median student loan payment – meaning half are higher, and half are lower – is $ 222 a month. The average payment is $ 393.

While this amount may seem reasonable for loan repayment, the truth is that it can be a significant burden on low-income borrowers, who often have difficulty making payments on their student loans. It can be an especially tough problem for retirees: The average Social Security retirement benefit is $ 1,543 per month, and for one in three seniors, Social Security is 90% of their income.

Unlike most other forms of debt, federal student loans generally cannot be canceled in bankruptcy, and the government can withhold your salary and up to 15% of your Social Security benefits for the repayment plan. In the fiscal year 2015 alone, nearly 114,000 borrowers age 50 and older had Social Security benefits withheld to pay delinquent federal student loans, according to a 2016 report from the Government Accountability Office. Half of those borrowers received Social Security disability benefits.

  • Student loan payments can also reduce retirement savings, says the Employee Benefit Research Institute, especially those who took out loans but did not finish college. “These families end up bearing the costs, but not the benefits, of attending college,” Craig Copeland, EBRI associate principal investigator, said in a news release.

In search of solutions

Due to the pandemic, the federal government has put student loans into forbearance until at least September 30, 2021. You will still owe the money, but no interest or penalties will accrue on these loans, representing 4 out of every 5 dollars owed on student loans.

Some companies, such as Aetna, Fidelity Investments, Estée Lauder, and Penguin Random House, have begun offering student loan repayment assistance as a benefit to employees. In general, the company usually offers an equivalent payment up to a certain limit. At the moment, only 4% of companies offer a debt repayment option for employees, although, given the current economic crisis due to COVID, these programs could experience slow growth.

Some borrowers have found relief with income-based repayment plans, which increase the term of the loan and limit payments based on your income. Although these plans increase the debt repayment period, after a certain time – 10 years for borrowers in certain public service careers and 20 to 25 years for all others – the debt balance is forgiven. Other solutions, such as federally mandated student loan forgiveness, are also on the table. 

The consequences of defaulting on a student loan can haunt you for years. If you’re having trouble making payments, talk to your lender, weigh your options, and see which solution is best for you—a Free 

John Wagoner writes for AARP on financial topics, from budgets and taxes to Social Security and retirement planning. He was previously a journalist for Kiplinger’s Personal Finance and USA Today and has written books on investing and the 1998 financial crisis. Wagoner’s investment column for  USA Today ran in dozens of newspapers over 25 years.

The Average student loan debt

The US Department of Education announced that it canceled $ 500 million in loans for 18,000 alumni of the ITT Technical Institute. This now-closed educational institution engaged in fraudulent practices. The institute, which was present in 38 of the 50 states of the United States before its closure in 2016, “misled students about the ability to transfer their credits to other institutions (…) credits are rarely transferred, and borrowers made little or no progress in their educational path, yet they were burdened with average student loan debt as a result of their time at ITT, “the statement read.

On March 18, the department took steps to provide $ 1 billion in relief to 72,000 debtors with previously approved borrower defense claims, noting that “this action reinstated exemptions for 41,000 borrowers and will help protect another 190,000 borrowers from risk. To lose their exemptions. “

Borrower defense refers to loan cancellation if a school misled students or “engaged in other misconduct in violation of certain state laws,” according to the department. The $1 billion raised “the total cancellation of loans under the Biden-Harris Administration’s defense of the borrower to $1.5 billion for approximately 90,000 borrowers,” the department noted at the time.

Meanwhile, on March 29, the Joe Biden administration canceled an additional $ 1.3 billion in student loans for 41,000 permanently and disabled borrowers. It has brought the total cancellation of student loans from the Biden administration to about $ 2.8 billion.

Yet total average student loan debt in the United States amounts to nearly $ 1.75 trillion, an average debt of $ 39,808 per student, according to real-time data on Democratic members of Congress are pressuring President Biden to use his executive power and issue a blanket loan forgiveness of up to $ 50,000 per person on the grounds of the debt’s impact on the debtors’ financial future.

How to pay for school

Several types of financial aid are available to help you pay for your education after finishing high school. It includes study grants and scholarships, federal work-study programs, and student loans. Suppose you determine whether a financial aid offer will cover enough of your education costs to make your studies affordable. In that case, the CFPB’s financial aid offer search tool may be helpful.

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Grants and scholarships

Grants and scholarships give you money to study, and you don’t have to pay it back. So they should be your first choice to pay for your education. The simplest way to apply for a grant is to fill out the Free Application for Federal Student Aid (FAFSA ® ). To find other scholarship and grant opportunities, you can also explore these other sources:

  • The financial aid office at a college or vocational school
  • Your high school counselor or a TRIO counselor
  • The free scholarship search tool from the United States Department of Labor
  • Federal agencies.
  • Educational agencies in your state.
  • Searches on the internet and in your library
  • Foundations, religious or community organizations, local businesses, or civic groups
  • Organizations related to your field of interest, such as professional associations
  • Organizations and groups dedicated to the preservation of ethnic and cultural heritage
  • Your employer or the employer of your family members

Federal work-study jobs

Federal work-study jobs are another way to help pay for college. This type of employment is a needs-based allowance that requires you to work part-time while you are studying. To access the work-study program, you must complete the FASFA ® form and meet the needs-based criteria. You will only be paid for the hours you work. For more information, contact your school’s financial aid office.

Student loans

Student loans fall into two categories: federal loans and private loans.

Federal loans include:

  • Direct loans are made directly by the US Department of Education.
  • PLUS loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or vocational school.
  • There are two types of federal loans that are no longer available but that people could still repay:
    • Federal Family Education Loans (FFEL) are loans made by private lenders but backed by the federal government.
    • Federal Perkins Loans, which are low-interest federal student loans for undergraduate and graduate students with exceptional financial needs

Private loans sometimes called “alternative loans,” are offered by private lenders, such as banks and credit unions. They are not backed by the federal government and do not include federal student loans’ benefits or protections. These loans may also require a cosigner (an endorsement from someone else who will also be responsible for repaying the loan) and a credit check (a review of your credit history).

Federal loans versus private loans

  Federal loans Private loans
Loan application
In most cases, you will not need a co-signer or a credit check to obtain a federal student loan (except for PLUS loans). You may need a joint signer and a credit check. Your credit score, and the scores of your cosigners, will influence the interest rate on your loan.
Interest rates(the cost of borrowing money) Federal loan rates are usually fixed and lower than private loan rates. Private student loans can have variable interest rates.
Loan repayment terms You won’t have to start repaying federal student loans until you graduate, drop out of school, or change your tuition hourly load to less than half the full schedule. Many private student loans require you to pay back while you are still in school.
Generally, undergraduate students with financial need are eligible for a subsidized loan. The government pays the interest while you are studying at the school with a minimum workload of 50% of the full time. Private student loans are not subsidized. You must pay the interest on your loan.
Federal loans can be consolidated into a Direct Consolidation Loan for free. Learn more about your consolidation options . Some lenders offer options to consolidate loans, but they will usually charge you a fee.
They won’t charge you if you pay off your loan faster. This is called a prepayment penalty or penalty charge. Prepayment penalty charges may apply.
If you are having trouble repaying your loan, you may be able to temporarily postpone your payments or reduce the amount of your installments. Private student loans may not offer you options to temporarily postpone your payments or to reduce the amount of your installments.
There are several payment options, including options that link the amount of your monthly payment to your income level. Private lenders are unlikely to offer payment options based on your income.
If you work in the public sector, you may be eligible to have a portion of your loan forgiven. A private lender is unlikely to offer a loan forgiveness program.
Average student loan debt

How to apply for financial aid

FAFSA ® is short for Free Application for Federal Student Aid. It is the only way to apply for federal student aid. The application is free. Complete your FASFA ® form at every year you are studying at a college, university, or vocational school, including the year before you start college, which could be the year you graduate from high school.

Many states and colleges use the information on your FASFA ® form to decide if you are eligible for state and school aid. Some private financial aid providers may also use the information on your FASFA ® form to determine if you are eligible for their aid.

How to complete your FASFA ® form

When you complete your FASFA ® form, you will also create your Federal Student Aid ID, the FSA ID. The FSA ID consists of a username and password that allows you to do the following:

  • Log in to your Federal Student Aid account to view your loan, grant, and enrollment history.
  • Complete your FAFSA® form.
  • Find out about repayment plans that suit your situation and compare those plans.
  • Complete your Master Promissory Note, a legal document, also known as a promissory note, that you complete committing to repaying your loan (s) and any accrued interest to the Department of Education.
  • Apply for payment plans based on your income or loan forgiveness, and complete other related loan documents.

Only you can create and use your FSA or FSA ID. Please do not share your FSA ID with anyone, regardless of who asks or what they tell you. Some dishonest people could use your FSA ID to access your account and steal your personal information.

How to pay off your loans

Student loans are debts that you must pay back, even if you don’t finish your degree. However, depending on your situation and the types of loans you have, you may be eligible to make a different repayment plan or access loan forgiveness.

Some companies may contact you to say that they can do what is necessary to pre-qualify you for a special government payment reduction or forgiveness program. But when it comes to qualifying for repayment and forgiveness programs, there is nothing a private company can do for you that you cannot do yourself for free.

You do not have to pay anything to enroll in these programs, and you can do so by calling your loan servicer, the company that handles your student loan billing, or at If you decide to use the services of a company to lower the number of your payments, remember that it is illegal for them to charge you before helping you.

How to pay off federal student loans

If you have federal loans, the Department of Education has free programs that may help you, including:

  • Income-Based Repayment Plans – Your monthly payment is based on the amount of money you earn.
  • Payment deferment or tolerance: You can postpone your payments if there is a good reason why you cannot pay right away, although the interest may increase your debt.
  • Debt forgiveness or discharge: You do not have to pay off some or all of your loans in some circumstances. You may qualify if, for example, you work for a government or non-profit organization, if you have a disability, or if your college or school closed or committed fraud. Additionally, under certain income-based repayment plans, payment of any outstanding balance after 20 or 25 years is forgiven. But in some cases, you may owe income tax on the forgiven or discharged amount.

These options are free. You can find more information on the Department of Education’s website or by contacting your federal student loan servicer.

How to pay off private student loans

In general, with private student loans, you have fewer options for loan forgiveness or cancellation. To explore your options, contact your provider directly. If you don’t know who your provider is, look at the latest billing summary.

How to avoid blackberry

Are you behind on your federal student loan payments? Here are some things you can do on your own, and for free, to catch up.

  • If you missed a few payments, take steps to avoid falling behind and limit the number of late fees you will have to pay.
  • If you stopped paying for 270 days, you might be in default, but you still have a few options to get out of default.

With private loans, you can be in default for a few reasons. If you miss three monthly payments (120 days), file for bankruptcy, or default on another loan, you could be in default. And If you think you are in default or at risk of default, contact your lender to find out about your repayment options.

If you are concerned about defaulting, review your private loan agreements carefully to understand your rights better. And If you did not receive a letter from your loan servicer and thought you might be delinquent, contact your loan servicer immediately to discuss your repayment options and determine if the delinquency can avoid.

Loan consolidation

When you consolidate your student loans, you are combining multiple loans into one. You could consolidate your loans to simplify your monthly payments, extend payment terms, or lower your interest rate. When you consolidate your loans, you get a new loan with new terms and conditions.

If all of your education loans have fixed interest rates, consolidation may not make much of a difference. If some or all of your loans have variable interest rates, consolidating them into a fixed-rate loan can save you money on the total amount of interest you’ll pay over the life of the loan.

How to Consolidate Your Federal Student Loans Into a Direct Consolidation Loan

Consolidating federal loans directly with the federal government is free. Some companies may offer to help you consolidate your federal loans with the federal government for a fee. But you do not have to pay for this service. Consolidating your federal student loans with the federal government is a process you can do on your own. Contact your student loan servicer at no additional cost to you.

When you consolidate your federal student loans, you get a Direct Consolidation Loan. It is a loan with a fixed interest rate for the remainder of the loan.

Before consolidating your federal student loans, consider the type of loans you have. It may not make sense to consolidate certain loans. For example, Perkins Loans give you exclusive deferment and cancellation rights that you could lose if you consolidate. And if you work in public employment, you could lose the progress you have made to qualify for public employee loan forgiveness. Once your federal student loans are combined into a Direct Consolidation Loan, they cannot separate again. Therefore, consider the advantages and disadvantages of consolidation.

Reasons to consolidate your federal student loans into a Direct Consolidation Loan.

  • Facilitates monthly payment: Consolidating multiple loans from different services into a single loan offers you the ease of having a single loan with a single monthly bill.
  • It gives you more time to repay your loans. By consolidating your loans, you can get up to 30 years to repay the consolidated loan, which means your monthly payment will be lower (but read the downsides below).
  • You can access different repayment plan options. By consolidating your federal student loans, you may be able to access other options for a repayment plan based on your income and loan forgiveness for public sector employees. But not all federal loans are eligible. For example, the FFEL program is not eligible for this benefit.
  • Allows you to change variable rate loans to fixed-rate loans. It can offer you greater certainty for your monthly budget.

Reasons not to consolidate your federal student loans into a Direct Consolidation Loan.

  • In the end, you will end up paying more. Having a longer-term to repay your loans means more (but lower) monthly payments, which means you’ll pay more in interest than you would without consolidating your loans.
  • You could lose your current borrower benefits. Certain types of federal loans benefit borrowers, such as interest rate discounts, loan principal reductions, or some loan repayment benefits that you could lose if you consolidate your loans.
  • You may lose what you have advanced. Consolidating loans with a repayment plan based on your income, or in case of making payments for the forgiveness of loans for public sector employees, means that you will lose credit for the number of payments you have made under these systems.

Not sure if consolidating your loans is right for you, but you’re having trouble meeting your monthly payments? Consider contacting your loan servicer to find out about deferral or forbearance as options for short-term payment relief, or consider switching to a repayment plan based on your income.

Consolidation of your private loans

If you want to consolidate your private student loans, your only option is a private lender. You may have to pay a cost to consolidate your loans, but avoid companies telling you that you have to pay that cost upfront.

Ensure you understand all the terms of your consolidated loan before agreeing to consolidate, especially if you have private and federal student loans. Some debt relief companies and some lenders offer the option of consolidating private loans with federal loans. They offer a new loan to lower the number of your monthly payments or the interest rate. Could you not do it?

If you consolidate your private loans with your federal loans, your loan becomes a single private loan. That means you will lose your federal repayment benefits and protections, such as deferral or forbearance, and will no longer be able to access income-based repayment plans or potential loan forgiveness programs.

Deciding whether to consolidate your loans is in your best interest or not.

Before consolidating your loans:

  1. Take your time.
  2. Find out what consolidation could mean for you. If you have private loans, talk to your lender.
  3. For federal loans, call the Department of Education’s Loan Consolidation Information Center at 1-800-557-7394.

How to Avoid Student Loan Debt Relief Scams

You have probably seen advertisements for companies promising to help you with your student loan debt. But you need to know that there is nothing that a debt relief company can do for you that you cannot do on your own and for free. And some of the companies that promise debt relief are scams.

Here are some ways to avoid the average student loan debt relief scam:

  • Never pay an upfront fee. It is illegal for companies to charge you before helping you. If you pay upfront to reduce or get rid of your student loan debt, you may not get any help, or you may not be able to get your money back.
  • Do not subscribe to any service that offers you fast loan forgiveness. Before knowing the details of your situation, scammers might say that they can make your loans disappear. They might offer you a debt forgiveness program that most people can’t access because they don’t meet the requirements. Or they could tell you that they can erase their loans by disputing those debts. But they can’t enroll you in a forgiveness program if you don’t qualify, and they can’t make your loans disappear.
  • Do not trust a seal from the Department of Education. Scammers use official-looking names, stamps, and logos. They promise special access to repayment plans, new federal loan consolidations, or loan forgiveness programs is a lie. If you have federal loans, go directly to the Department of Education’s website.
  • Don’t be rushed. To get you to act fast, imposters tell you that if you don’t sign immediately, you could miss out on qualifying for a repayment plan, loan consolidation, or loan forgiveness programs. Take your time and check it out.
  • Do not share your FSA ID with anyone. Some scammers say they need your FSA ID to help you, but don’t share your FSA ID with anyone. Some dishonest people could use that information to access your account and steal your identity.

Help resources

You do not have to pay to get help with your student loans. There is nothing a company can do for you that you cannot do on your own and for free. If you have federal loans, start at If you have private loans, contact your lender directly.

Average student loan debt

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