Student loan debt statistics

More than half of Americans (56 percent) agree that the cost of higher education has gotten out of hand. This is probably the reason why many have had to rely on student loans over the years to bridge the financial gap when other forms of aid fall short.

As of today, more than 43 million Americans hold federal student loans, with a collective balance exceeding $1.7 trillion. With federal student loan payments resuming, many Americans are still struggling to fit this bill into their monthly budgets. Luckily, there are some options available that can make payments more manageable.

Key student loan debt statistics

Student loan debt is a national crisis that affects millions of Americans. Though the Department of Education has led efforts to tackle this issue in recent years, rising education costs make it hard for many to afford college without loans.

How much student loan debt is there?

Student loan debt is the second largest form of consumer lending debt in the U.S., affecting more than 43 million Americans. But as college costs continue to increase, so does general concern about college affordability and the need for loans to fill in the blanks.

According to Bankrate, nearly half of student loan borrowers think the cost of higher education is too high, with over a third (34 percent) saying students aren’t fully aware of the negative consequences borrowing can have before taking out loans.

But while 32 percent of Americans feel that student loan debt is a national crisis, 30 percent say that — despite not knowing enough about loans at the time of borrowing — borrowers should still repay their debt in full.

The U.S. student debt crisis

Data from the Federal Reserve shows that the total outstanding student loan debt has increased by roughly 52 percent since 2013.

Source: The Federal Reserve

Student debt is the second largest form of consumer debt, accounting for nine percent of the nation’s household debt as of the third quarter of 2023.

Student loan debt and the end of the repayment pause

On June 30, 2023, the Supreme Court blocked the Biden Administration’s one-time student loan forgiveness plan, which would’ve canceled up to $20,000 in federal student loans to borrowers who met the specified criteria.

The Supreme Court’s ruling also meant the end of the three-year administrative forbearance on federal student loan payments. A decision that has been met with mixed feelings.

On one hand, close to a third of Americans (31 percent) believe that the federal government hasn’t provided enough financial support to borrowers, while 17 percent think that the government has done “too much” to assist borrowers.

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, which expired on October 1, 2023.

“Before the pandemic, tens of millions of borrowers and their families were crushed by overwhelming and unmanageable student loan balances,” Ella Azoulay, research and policy analyst at the Student Borrower Protection Center (SBPC) says.

“While the student debt crisis is known to be a barrier preventing borrowers from achieving financial stability and other milestones, such as homeownership, the payment pause helped borrowers improve their credit and get out of default,” she adds.

Still, struggling borrowers aren’t completely out of luck. The Department of Education has implemented a 12-month “on-ramp” transition, which will prevent servicers from reporting missed payments to the credit bureaus or placing borrowers who miss payments on default until September 30, 2024.

Student loan repayment plans

While mass loan forgiveness isn’t on the cards, there are some repayment options that can help you keep your accounts current and make payments affordable.

Individual student loan debt statistics

Here’s how student loan debt in the U.S. impacts individual borrowers.

Student debt and mental health

Forty-seven percent of Americans who say their mental health has been negatively impacted by financial concerns name debt as the primary culprit. Just like any other kind of debt, student loans can have a significant impact on a borrower’s mental health, increasing anxiety and stress.

According to a survey by ELVTR, 54 percent of respondents reported mental health issues related to student debt, including the following:

• 56 percent reported experiencing anxiety.
• 32 percent had depression.
• 20 percent experienced sleeping problems.
• 17 percent reported panic attacks.

Additionally, 10 percent of respondents said they had other mental health issues not listed above.

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:

Source: U.S. Department of Education

Student loan debt by state

The three states with the lowest student debt per borrower are:

• North Dakota
• Iowa
• 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
• Virginia

In these states, 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 map 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.

• Federal student loan balances by state

Source: U.S. Department of Education

Student loan debt by age

Millennials, followed by Gen Z and Gen X, are among the most affected generations by student loan debt. This may explain why a large percentage of them (59 percent of Gen X, 47 percent of millennials and 40 percent of Gen Z) agree that the government should do more to help borrowers.

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.

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 earn up to 45 percent more on a weekly basis than those with just a bachelor’s degree, according to BLS data.
• Those with advanced degrees also experience lower unemployment levels.

Student loan FAQs

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  What is a student loan?

  Student loans are a type of installment loan specifically designed to cover college-related expenses. These include tuition and fees, room and board, course materials, books, transportation and more. These loans can be federal or private.
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  How do I apply for a student loan?

  The process for getting a student loan will depend on the type of student loan you’re applying to.To apply for federal student loans, you’ll need to fill out the FAFSA. To do this, you’ll have to visit StudentAid.gov and provide the following information:

  • • Your Social Security number.
    • Your driver’s license.
    • Your household size and income.
    • Your school’s information.

  The form will likely take about 30 minutes to complete, after which both you and your school will get a document known as the Student Aid Report (SAR) to determine your eligibility for loans.To apply for private student loans, you’ll need to do the following:

  • • Calculate how much you need.
    • Check your credit score.
    • Research and compare lenders.
    • Gather all of the necessary information, including your Social Security number, proof of ID, proof of income, statements of debts and assets and your school’s information.
    • Prequalify with at least three lenders to see which one gives you the best offer without hurting your credit.
    • Pick a lender and fill out an official application.
    • Add a co-signer if you don’t have a job or another source of income.
    • Submit your application and wait for a decision.

  For more details on how to apply for both federal and private student loans, check out the full guide to getting a student loan.

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  How long does it take to pay off student loans?

  Federal student loans have a standard repayment term of 10 years. However, depending on your repayment plan and type of loan, you may extend this term to up to 30 years. Private student loans, on the other hand, have repayment terms ranging from five to 20 years.