How Many People Have College Debt?

Highlights from the report The number of persons with outstanding student loans has risen to 44.7 million, with 42.3 million of them having a federal loan debt.

22.3 million borrowers with federal student loan balances are in forbearance, while 5.9 million are still enrolled in school.
There are at least 15.8 million debtors who have loans from both undergraduate and postgraduate school.

What percentage of college students are in debt?

Student loan debt is now the second most common type of consumer debt. In the United States, 43% of college students say they owe money for their education. 65 percent of today’s college students graduate with student debt.

15% of all persons in the United States have outstanding undergraduate school debt, whereas 7% have outstanding postgraduate student debts.
Between 39 and 50 percent of indebted student borrowers have loans from both their undergraduate and postgraduate studies.
93 percent of adults with student loan debt say they borrowed to pay for their own education, while 81 percent say they borrowed to pay for the education of a child or grandchild.
Students who are first-generation college graduates are twice as likely to be late on their student loan payments.
Graduates of for-profit, private colleges are more than twice as likely to default on their student loans.
To obtain a bachelor’s degree, public university students borrow an average of $30,030.
Attendees at private, non-profit universities borrow $33,900, whereas private, for-profit university students borrow $43,900.
The rate of increase in student loan debt is 353.8 percent higher than the rate of increase in tuition costs.
The entire student loan debt amount is growing at a rate of 23.6 percent each year, or 513 percent faster than the nation’s gross domestic product (3.85 percent ).
94.8 percent of persons who have student loan debt have taken out loans to pay for their undergraduate degree.

Federal Student Loan Debt

Despite the fact that 30% of students borrow money from the federal government, they account for 92.6 percent of overall student loan debt.

Subsidized Stafford loans account for 18.6% of federal debt, while unsubsidized Stafford loans account for 34.2 percent.
Parent PLUS loans, which are borrowed by parents on behalf of their children, account for 6.4 percent of student loan debt.
Grad PLUS loans, which are given to graduate or professional students, account for 5% of student loan debt.
The federal government lends $45.3 billion to 44.4 percent of all postsecondary students each year (including graduate and professional students).
The Department of Education has set aside $77 billion for federal direct student loans and $13.3 billion for FFEL loans in its budget.
The Department of Education has set aside $90.2 billion for all loan programs, leaving $44.9 billion after disbursement to students.

Private Student Loan Debt

Undergraduate loans account for 88.5 percent of the total, while graduate student loans account for 11.5 percent.
Student loans from a private source, such as a bank or credit union, are used by 13% of students.

Other Educational Debt

Student loans are intended to pay only a portion of educational expenses. Many students borrow money from other sources to meet living expenses throughout their college years or other school-related expenses not covered by their student loans.

A balance on a student loan is owed by 95% of borrowers with outstanding debt connected to their own education.
A credit card balance is held by 23% of borrowers with outstanding school debt.
A home equity loan was used by 4% of indebted borrowers, while 11 percent used another sort of loan.
Home equity loans were used by 11% of indebted borrowers who borrowed to pay for a child’s or grandchild’s education.

What percentage of the population has student loan debt?

What Is the Student Loan Debt Rate in the United States? According to the Federal Reserve, nearly 30% of all American adults will be in debt by 2020. 1 This figure indicates the increasing value of a college diploma in obtaining a well-paying job.

How much college debt does the average person have?

According to U.S. News, the average student loan debt for recent college grads is about $30,000. At 9:00 a.m. on September 14, 2021. According to data submitted to U.S. News in its annual poll, college graduates from the class of 2020 who took out student loans borrowed an average of $29,927.

What percent of college students have no debt?

The vast majority of four-year public university graduates graduate with a small amount of student debt that is easily manageable. Approximately 42 percent of students at four-year public universities graduated debt-free, and 78 percent graduated with less than $30,000 in debt. Only 4% of graduates from public universities earned more than $60,000. Those with debts of more than $100,000 are even rarer: they account for fewer than half of one percent of all four-year public university undergraduates who complete their degrees. 1

Student Debt in Perspective

Tuition and fees, as well as housing and board and other educational costs such as textbooks, are covered by student loans. The average debt upon graduation for those who borrow is $25,921 — or $6,480 for each year of a four-year degree at a public university. The average debt upon graduation for all public university graduates, including those who did not borrow, is $16,300. 1 Consider that the average bachelor’s degree holder earns around $25,000 more per year than the average high school graduate to put that level of debt into perspective. 2 Over the course of their lives, bachelor’s degree holders earn an extra $1 million.” 3

Furthermore, throughout the last two decades, the percentage of student-loan borrowers’ income spent on debt payments has remained stable or even decreased.

4 Although 42% of undergraduate students at public four-year universities finish debt-free, a student graduating with the average amount of debt among borrowers would pay $269 a month in student debt. 5 In recent years, the majority of students with federal loans have become eligible to enroll in an income-driven repayment plan. Students often limit their student-loan payments to 10% of their discretionary income under such schemes. In 2011, the most current statistics available, the average monthly payment for borrowers from four-year public colleges in income-driven repayment programs was $117. 6

Some have asserted in recent years that school debt prohibits graduates from becoming homeowners. However, after reviewing the statistics, the White House Council of Economic Advisors decided that going to college increases the likelihood of owning a home, not decreases it. “Households with student debt are more likely to buy a home by the age of 26 than those who did not attend college, according to a White House report. “College graduates with and without student debt are equally likely to buy a home by the age of 34, and both are significantly more likely than those without a college diploma.” 6

Total Student Debt

Some have also expressed concern about the $1.5 trillion overall student loan load in the United States, which includes graduate student debt. It is true that during the last two decades, total student debt has climbed. However, portion of this rise can be attributed to rising enrollment in the country’s universities. Graduate students account for around 40% of current student loan liabilities, but accounting for only 15% of post-secondary students. 7 As they pursue a job in a profession that pays much more, students in these degrees take on additional debt. Workers with higher degrees make $58,000 more per year on average than those with only a high school diploma. 2

1. National Center for Education Statistics, U.S. Department of Education, National Postsecondary Student Aid Study, 2015–16.

2. Current Population Survey, United States Bureau of Labor Statistics

3. “Do the Benefits of College Still Outweigh the Costs,” Current Issues in Economics and Finance, 2014. 3. Abel and Deitz, “Do the Benefits of College Still Outweigh the Costs,” Current Issues in Economics and Finance, 2014.

4. “Is a Student Debt Crisis on the Horizon?” by Akers and Chingo. 2014.

5. studentloans.gov, payback estimator, $29,490 in debt, 4.53 percent interest rate (direct federal loan rate in 2020 is 4.53 percent), ten-year repayment period

Investing in Higher Education: Benefits, Challenges, and the State of Student Debt, White House Council of Economic Advisors, July 2016.

7. Delisle, New American Foundation, “The Graduate Student Debt Review.”

Is college worth the debt?

College Debt Statistics A college degree is still worthwhile from a general economic standpoint. A four-year degree “costs on average $102,000,” which means that even when you factor in the typical $30,000 debt that students finish with, it’s still a good deal.

Why is free college a bad idea?

None of this is to say that higher education in the United States isn’t in desperate need of reform, or that the country shouldn’t do more to assist low-income students in obtaining degrees. Because the expense of college — particularly acquiring a bachelor’s degree or higher — has become prohibitively expensive, Biden’s free-tuition idea has gained traction.

Meanwhile, the Brookings Institution recently highlighted studies indicating that the allure of free community college would attract a large number of students away from four-year institutions, perhaps reducing the number of bachelor’s degrees acquired.

Focusing on ways to cut education’s total expenses, as well as innovative loan structures that incentivise students to finish degrees and find work, would be beneficial for the country. The focus should be on assisting low-income students in overcoming all of the obstacles that stand in their way of earning a college diploma, as well as lowering overall expenditures.

One of the most common arguments against free tuition is that forcing all Americans to pay for higher education is unfair. The truth is that a system that makes college degrees accessible and affordable to as many individuals as possible will benefit the country as a whole.

Who owns most student debt?

According to a July 2021 research by MeasureOne, an academic data organization, the US Department of Education owns nearly 92 percent of student loans. Borrowers of federal student loans total 42.9 million.

How long does it take to pay off college debt?

Highlights from the report The average student loan borrower takes 20 years to repay their debt.

In the first five years of their loan, 21% of borrowers see their overall student loan debt sum climb.
The average wage of a medical school graduate is insufficient to cover student debt payments.

Is student debt a crisis?

Over the last decade, the student debt crisis has grown by 144%, putting 45 million Americans on the hook for $1.7 trillion in loans. Increasing tuition costs and uncontrolled borrowing aren’t helping the situation.

On Wednesday, the Bipartisan Policy Center, a Washington, DC-based think tank, released a research assessing how student loans affect the federal budget and the US economy. It stated that while the federal student debt portfolio was $642 billion in 2007, it had grown by 144 percent to $1.56 trillion by 2020, exceeding the increase in the number of borrowers, which climbed from 28 million to 43 million during the same time period.

According to the analysis, if the student-loan business continues to give out loans that borrowers cannot afford to repay, both borrowers and taxpayers will face grim economic futures.

In a statement, Kevin Miller, BPC associate director of higher education, stated, “The student loan system is saddling millions of students and families with debt that affects their long-term financial security and well-being.” “When borrowers are unable to repay their debts, the federal government and taxpayers are forced to pick up the tab. Reforms are needed to safeguard both students and taxpayers from the detrimental effects of excessive student debt.”

How much is a lot of student debt?

According to the Federal Reserve, the average college debt among student loan borrowers in America is $32,731. This represents a 20 percent growth from 2015 to 2016. The majority of debtors owing between $25,000 and $50,000 in student loan debt. However, more than 600,000 borrowers in the United States have debts of more than $200,000, and this number is expected to rise.

Is it realistic to graduate debt free?

Your overall debt upon graduation should be less than your annual beginning income, according to the rule of thumb. You should be able to pay off your debt in ten years. Any more than that, and you’ll find it difficult to repay.