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2020 Student Loan Debt Statistics « CareersWiki.com

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Skip to contentStudent debt is a bigger problem than ever.&nbsp;Anyone who has been paying attention the past decade knows that pursuing higher education requires a much larger financial investment than in the past.&nbsp;The average cost of a 4-year education has nearly tripled over the past three decades [1] and more students are forced to take out loans to cover the cost of education.We compiled a list of stats around the growing student debt crisis including how much is owed, the types of debt, and what the outlook is.ContentsThe total amount of outstanding student loan debt reached an enormous $1.5 trillion in 2020 [2].To put that number in perspective, $1.5 trillion is higher than the GDP of nearly half of the world’s countries and about equal to the GDP of several developed nations such as South Korea, Spain, Russia, Canada, and Australia.&nbsp;To put the point another way, if you had $1.5 trillion and spent a dollar every second, it would take you over 30,000 years to spend it all, assuming you were not making any extra money.Based on data gathered for the class of 2018, the average student loan debt per borrower was $28,565.&nbsp;This value was up $277 from the class of 2017 which had an average debt per borrower of $28,288 [3]. Connecticut is the state with the highest average debt student debt per borrower at $38,510.Nearly 1 in 4 Americans have some amount of student debt, which is about 44.5 million people [4]. A sizable majority of these borrowers are under the age of 60.Borrowers between the ages of 25 and 43 have the highest amount of student debt while borrowers aged 35-49 have the highest delinquent balances [5]. The majority of older people with loans have them as a result of cosigning.&nbsp;The vast majority of existing student loan debt is owned by the US Dept. of Education. Nearly $1.45 trillion of the student loan total is owed in federal loans.&nbsp;In contrast, private loans make up only $119 billion [6]. Additionally, most private loan holders also have federal loans.&nbsp;Over the course of a year, the average debt holder pays nearly $4,800 a year which comes out to around $400 a month. The median monthly student loan payment is only $222.This amount has increased by nearly $150 from the average payment of $227 in 2005 [2].The average amount of student debt for those who earned a medical degree was $161,772. The next highest degree was Law at $140,616, and Master’s degrees at $58,539.&nbsp;Out of all graduate degree seekers, those with the least amount of debt were those earning their MBAs with an average debt of $42,000 [2].Nearly 1 in 10 of every federal loan borrower is in default on their student loans [7]. In fact, only 56% of federal student loan debt is being repaid; the rest is in either deference, forbearance, or defaulted.Despite what you may think, those with the highest debt amount do not have the highest default rates. The opposite is true, those with smaller debt amounts have the highest initial default rates.Borrowers who owe less than $10,000 represent two-thirds of defaults that happen in the first 3 years of repayment [6].Although federal loans make up the majority of student loan debt, the total amount of private student debt is growing rapidly. Private student loan debt grew by more than 20% from 2014-2020 [8].Data collected over the past thirty years shows that the average cost of tuition, room and board, and expenses for a 4-year university has nearly doubled. The same data shows the cost for private universities has nearly tripled, even when accounting for inflation [2].Despite the rising cost of education and ballooning student debt, more Americans are opting into higher education.Nearly 60% of those 25 and older have gone to college for some period of time [2].Most people with federal student debt don’t make payments directly to the government. They instead use loan servicers as go-betweens. Most federal direct loans are handled by FedLoan Servicing which is known as AES-PHEAA [2].The majority of borrowers owe under $40,000 but nearly 2.8 million borrowers owe over $100,000.&nbsp;Those who owe more than $100,000 hold about 34% of the total student debt [6].Currently, 18.6 million federal loan holders are in the repayment phase.&nbsp;That’s around 42% of the total amount of debt holders. The rest of the federal debt is in deferment, forbearance, or default [9].As of 2018, around 48% of borrowers were unable to decrease their balance from quarter to quarter.&nbsp;Increased interest rates mean their balance is accumulating interest faster than they can pay off [10].Data seems to imply that black students are more likely to borrow to finance their education. Some 80% of black students take out federal loans compared to some 60% of white students [11].&nbsp;Moreover, black students owe about $7,400 more on average than white, Asian, and Latino students.&nbsp;Student debt payments seem to affect women the most. White women and black women typically owed 92% and 111% of their first-year annual income post-graduation, respectively.&nbsp;This figure is compared to 70% and 89% for white and black men, respectively [8].The majority of student loans (29.7 million) are direct Stafford subsidized loans. Subsidized loans receive federal assistance to make interest payments [8].2011 was the highest year for student loan borrowing in which $127.7 billion in federal loans was taken out.&nbsp;Borrowing has declined 7 years in a row and is now at $105.5 billion for 2018 [6].In 2018, there were about 50,000 applications for public loan forgiveness programs. Of those, only about 420 applications were approved.&nbsp;72% were rejected because they did not meet the requirements and 37% were rejected because of incomplete information [12].As of 2019, student loan debt is the second largest category of debt in the country, just under the total amount of housing debt [13].The rates of student loan borrowers over the age of 60 have increased by 1,256% in the past 15 years. Most older borrowers cosign with another member of their family [8].Estimates hold that the average time to pay off student loan debt is 21.1 years. Graduate degrees take a longer time to pay off at 23 years. The data on this subject is very limited though and more research is needed to pin down exact figures [14].80% of degree holders were in repayment or had repaid their loans [14].Around 16% of borrowers (7.37 million) are on income-driven repayment plans. These plans base monthly payments off of net income [9].Since most private schools are more expensive than public universities, private school graduates usually have higher amounts of student debt.Only 66% of public school graduates have student loans [15].Again perhaps unsurprisingly, private school graduates have a higher average debt burden than public school grads.The average student debt for private school graduates was $32,300 compared to $28,650 for public school graduates [15].Student loans also affect peoples’ ability to save for retirement.Data shows that college graduates without debt have saved nearly twice as much by age 30 than college graduates who took out loans. Those who had no debt had saved an average of $18,200 for retirement while those who did have debt only saved an average of $9,100 [17].The effects of student debt are far-reaching. Nearly 48% of recent graduates said they were putting off buying a house due to student debt payments being too burdensome.Moreover, college graduates with the median amount of student debt do not expect to be able to own a home until they are 35 [18].The student debt crisis is having far-reaching consequences.As the debt burden increases, more people are essentially locked out of participating in the economy in a meaningful way, which has detrimental effects on the growth of the economy.Some experts argue that a policy canceling the federal student debt would marginally increase the nation’s debt burden while adding a solid 1% growth to the nation’s GDP.&nbsp;&nbsp;Citations“Trends in College Pricing 2019 Highlights.” Research, 6 Nov. 2019, research.collegeboard.org/trends/college-pricing/highlights.“Average Student Loan Debt in the U.S. – 2020 Statistics.” Nitro College, Nitro College, www.nitrocollege.com/research/average-student-loan-debt.“Student Loan Debt by School by State Report 2019.” LendEDU, LendEDU, 8 Aug. 2019, lendedu.com/student-loan-debt-by-school-by-state-2019/.Lockert, Melanie. “Student Loan Debt Statistics for 2020 [Average Student Loan Debt].” Student Loan Planner, 9 Jan. 2020, www.studentloanplanner.com/student-loan-debt-statistics-average-student-loan-debt/.Lembo Stolba, Stefan. “Student Loan Debt Delinquency by Age.” Experian, 16 Oct. 2019, www.experian.com/blogs/ask-experian/research/student-loan-debt-delinquency-by-age/.Carter, Matt. “U.S. Average Student Loan Debt Statistics.” Credible, Credible, 18 Nov. 2019, www.credible.com/blog/statistics/average-student-loan-debt-statistics/.Hagen, Kailey. “5 Student Loan Debt Statistics You Won’t Believe.” The Ascent, The Ascent, 28 Sept. 2019, www.fool.com/the-ascent/student-loans/articles/5-student-loan-debt-statistics-you-wont-believe/.Song, Justin. “Average Student Loan Debt in America: 2019 Facts &amp; Figures.” ValuePenguin, 17 Sept. 2019, www.valuepenguin.com/average-student-loan-debt.Nykiel, Teddy. “2019 Student Loan Debt Statistics.” NerdWallet, 20 Dec. 2019, www.nerdwallet.com/blog/loans/student-loans/student-loan-debt/.Morgan, Kyle. “Student Loan Debt Statistics of 2020: Facts and Figures.” Finder, 8 Nov. 2017, www.finder.com/student-loan-debt-statistics.Pallardy, Richard. “Racial Disparities in Student Loan Debt.” Saving for College, 27 Aug. 2019, www.savingforcollege.com/article/racial-disparities-in-student-loan-debt.Friedman, Zack. “99.5% Of People Are Rejected For Student Loan Forgiveness Program.” Forbes, Forbes Magazine, 3 Jan. 2019, www.forbes.com/sites/zackfriedman/2019/01/03/student-loan-forgiveness-data/#27b3545568d0.Issa, Natalie. “U.S. Average Student Loan Debt Statistics in 2019.” Credit.com, 19 June 2019, www.credit.com/personal-finance/average-student-loan-debt/.Carter, Matt. “Average Time to Repay Student Loans in the U.S.” Credible, 18 Dec. 2019, www.credible.com/blog/statistics/average-time-to-repay-student-loans-statistics/.“U.S. Student Loan Debt Statistics for 2019.” Student Loan Hero, 4 Feb. 2019, studentloanhero.com/student-loan-debt-statistics/.Brown, Mike. “Tracking the Private Student Loan Industry.” LendEDU, 16 July 2019, lendedu.com/blog/state-of-private-student-loans-report/.“Are Student Loans Making Borrowers Delay Life Decisions?” SoFi, 16 May 2019, www.sofi.com/learn/content/student-loans-and-life-decisions/.Lloyd, Alcynna. “America’s Debt-Burdened Millennials Are Delaying Homeownership by 7 Years.” HousingWire, 9 Aug. 2019, www.housingwire.com/articles/49819-americas-debt-burdened-millennials-are-delaying-homeownership-by-7-years/.Copyright 2019 © All Rights Reserved.

Skip to contentStudent debt is a bigger problem than ever.&nbsp;Anyone who has been paying attention the past decade knows that pursuing higher education requires a much larger financial investment than in the past.&nbsp;The average cost of a 4-year education has nearly tripled over the past three decades [1] and more students are forced to take out loans to cover the cost of education.We compiled a list of stats around the growing student debt crisis including how much is owed, the types of debt, and what the outlook is.ContentsThe total amount of outstanding student loan debt reached an...

2020 Student Loan Debt Statistics « CareersWiki.com

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