The tuition cost in the United States has gradually increased over the last 30 years. Currently, public college tuition has increased from about $4,160 to around $10,740. The tuition fee has increased from around $19,360 to $38,070 in private non-profit institutions. Therefore, you can’t entirely blame the students for the loan debt amount because inflation has played a great role in tuition adjustment over time.
One thing is certain, though – as tuition increases, so does student debt. Nowadays, you will discover that over half of college students leave school with debt. Interestingly, federal student loan debt accounts for most student loans in the United States. To put things into perspective, about 92% of all outstanding student loans come from federal debt.
According to research, the average student loan debt in the U.S hovers around $32,731. Also, the median student loan debt is about $17,000. This increment in student loan debt is a glaring example of how inflation has worked its way into the fabric of society. Surprisingly, student loan debt has increased by more than 302% since 2004.
Although the average debt keeps increasing over time, student loans are the best way to sponsor yourself through college without issues. Additionally, college students utilize these loans because they can pay them off in installments once they start working. The interest rates on these loans also make them quite frightening. Since we found that the student loan debt keeps increasing among bachelor’s degree recipients and other college graduates, we have provided the average student loan debt statistics to help you understand how these loans work. You can study these statistics before you obtain a student loan.
Quick Student Loan Debt Statistics
- Average student loan debt by the borrower: $32,731
- Student loan borrowers in the United States: $44.7 million
- Total student loan debt in the United States: $1.52 trillion
- Connecticut has the highest student loan debt for the 2017 class, with about $38,510.
- The student loan debt for borrowers aged 60 and over has increased exponentially by 1,256% since 2004.
The Average Student Loan Debt in the U.S
According to the Federal Reserve, the average student loan debt among students in the United States is $32,731. The debt statistics over the past decade have increased by approximately 20% from 2015 to 2016. This increment is alarming because most borrowers owe between $25,000 and $50,000 in outstanding student loan debt. However, more than 600,000 people in the United States attend school by borrowing and owe more than $200,000 in student loan debt.
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A quick look at the student loan debt statistics reveals that over eight million people owe less than $5,000 in student loan debt. More than seven million people with graduate degrees owe about five thousand to ten thousand in student loan debt. The highest number of student borrowers falls within those who owe about $10,000 to $25,000, closely followed by individuals who owe about $25,000 – $50,000 in student loans.
More than 3.68 million college graduates owe about $50,000 – $75,000 in student loans, while over 1.6 million people owe around $75,000 to $100,000. Over a million people owe more than $100,000 to $15,000 in student loans, while more than half a million people owe an amount from $150,000 and above.
Overall, the outstanding debt in the country was around $346 billion in 2004. This figure has since increased to $1,386 billion as of 2017. Thus, you can say that the total student loan debt increased by 302% in 13 years. The total student loan balance has risen by $80 billion since 2004.
It is interesting to see how the year-over-year changes evolved with time. The loans increased from $345 billion in 2004 to $391 billion, marking a year-on-year increase of 13%. This percentage increase almost doubled by 2006 as the total balance rose from 23% 13% to 23% in just a year’s space. The total balance fluctuated from 2007 until 2011 when the total balance experienced a year-over-year change of 8% ($873 billion). Since then, the rates dropped to 5% in 2017, although the total balance stood at $1.386 billion.
Year Total Balance (billion dollars) Year/Year Change (%)
2005 391 13
2006 481 23
2007 547 14
2008 639 17
2009 721 13
2010 811 13
2011 873 8
2012 965 11
2013 1,079 12
2014 1,155 7
2015 1,231 7
2016 1,316 7
2017 1,386 5
Average Student Loan Debt by State
- Connecticut is the state with the highest student loan debt for the 2017 class. The state has a loan debt of $38,510.
- Utah, in contrast, has the lowest average student loan debt balance ($18,838) and the lowest rate of residents with student loan debt (38%).
- The statistics also reveal that more than half (74%) of New Hampshire, West Virginia, and South Dakota students from the class of 2017 have student loan debt.
According to research, each state’s average student loan debt for 2017 is 28,650. The figure ranges from $18,838 to $38,510. Additionally, over 45% of college students have student loan debt, aside from Utah. The following table depicts the average college debt per state within the United States with their rank based on the debt.
Rank State % Residents With Debt Average Debt (%)
- Alabama 50 31,899
40 Alaska 46 25,682
- Arizona 54 23,967
- Arkansas 55 26,799
- California 50 22,785
- Colorado 52 26,530
- Connecticut 57 38,510
- Delaware 62 34,144
- District of Columbia 46 30,775
- Florida 50 24,041
- Georgia 57 28,653
- Hawaii 49 25,125
- Idaho 61 26,675
- Illinois 61 29,214
- Indiana 57 29,561
20 Iowa 63 29,859
- Kansas 59 27,720
- Kentucky 64 28,447
- Louisiana 48 27,210
- Maine 56 21,364
- Maryland 56 29,314
- Massachusetts 59 32,065
- Michigan 58 31,289
- Minnesota 68 31,734
- Mississippi 58 30,439
- Missouri 58 27,108
- Montana 59 28,466
- Nebraska 54 25,750
- Nevada 49 22,064
- New Hampshire 74 34,415
- New Jersey 61 32,247
- New Mexico 54 21,237
- New York 60 30,931
- North Carolina 57 26,526
– North Dakota* – –
- Ohio 62 30,629
- Oklahoma 49 25,952
- Oregon 56 27,885
- Pennsylvania 67 36,854
- Rhode Island 64 36,250
- South Carolina 58 30,891
- South Dakota 74 31,275
- Tennessee 56 25,252
- Texas 55 26,824
- Utah 38 18,838
- Vermont 60 30,651
- Virginia 56 29,887
- Washington 52 23,936
- West Virginia 74 27,505
- Wisconsin 64 29,569
- Wyoming 47 22,524
According to the above table, Connecticut has the highest number of debt owners based on the percentage of residents with debt ($38,510). Pennsylvania is the next state with a debt of $36,854 (67%), while Rhode Island occupies the third spot ($36,250). New Hampshire ($34,415, 74%) and Delaware ($34,144, 62%) make up the top fourth and fifth states with the highest percentage of residents with student debt loans.
Average Student Loan Debt Based on Age
- The student loan debt for borrowers aged 60 and over has risen by 1,256% since 2004. Borrowers within this age bracket only had $6.3 billion in debt while obtaining a college degree.
- While there are more student loan borrowers less than 30 years, borrowers between ages 30 and 39 have the highest outstanding debt.
- Borrowers under 30 accounted for the most outstanding loan debt until 2014, when those between 30 and 39 had the highest rates.
Considering the age group statistics from the Federal Reserve Bank of New York, you will find more borrowers under 30 years than any other age bracket. The higher rates in this age group could be due to poor financial decisions while attaining financial age as undergraduate students. Interestingly, when you consider the percentage growth, the number of borrowers under 30 has not increased much in the last 13 years compared to other age groups.
The student loan balances across all age groups have risen on average by 302% since 2004. Borrowers over 60 had the most drastic percentage increase from $6.3 billion to $85.4 billion over a decade and three years. However, it is worth noting that borrowers in their 20s and 30s account for more than 65% of all student loan debt.
Year Under 30($b) 30-39 ($b) 40-49 ($b) 50-59 ($b) 60+ ($b)
2004 147.8 112.3 48.7 29.5 6.3
2005 162.4 127.6 56.4 36.4 8.2
2006 196.3 154.8 69.8 48.2 12.2
2007 219.8 174.5 80.0 56.4 15.9
2008 250.9 205.4 94.4 67.6 20.4
2009 275.9 232.2 109.0 78.5 25.3
2010 301.2 261.2 128.5 89.6 30.8
2011 316.4 282.0 141.7 97.0 35.4
2012 322.7 320.2 167.3 111.3 43.0
2013 362.0 354.1 188.1 124.9 49.8
2014 370.5 383.1 207.6 136.5 57.7
2015 376.4 408.4 229.6 149.7 66.7
2016 383.2 437.4 255.6 163.2 76.3
2017 383.8 461.0 278.9 177.2 85.4
Average Student Loan Debt Based on Race and Gender
- According to the statistics, women generally use a higher percentage of their income to settle student loan debt than men.
- Student loan debt balances for African-American women account for 111% of their first-year income.
- Asian men account for the lowest percentage of student loan debt. A study shows that student loan debt only takes up about 65% of their first-year income compared to men from other races.
We further considered the amount of money given to student loan payments once these college graduates become workers. We wanted to understand how the repayment plan for these loans affected the lives of borrowers post-graduation. You can calculate this metric by dividing a borrower’s total student loan debt by their annual income one year after graduation.
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We found that, on average, African-Americans experienced the highest student debt balances compared to other races regarding first-year income. Additionally, we discovered that Asian-Americans had the lowest percentage. Hispanic borrowers were somewhere in between Asian-Americans and Black Americans.
Federal Student Loan Debt
- Research shows that many students (precisely 29.7 million) obtain direct loans. These students collect direct Stafford subsidized loans from the federal student loan body.
- There is, however, a difference of $214.1 billion outstanding for unsubsidized rather than subsidized loans. Thus, students with unsubsidized Stafford loans owe more than their subsidized counterparts.
- Consolidate loans had the highest total debt outstanding. The loan type had $515.6 billion outstanding loan debt for just 11.8 million borrowers.
The findings suggest that most student loan borrowers obtain loans from the federal government. According to the reports, there is an outstanding of $1,447.1 billion from a combined 43 million borrowers. Direct loans constitute the bulk of those loans because they include subsidized, PLUS, unsubsidized, and consolidated loans. You can find the breakdown for this information in the next table.
Loan Type Outstanding($b) Number of Borrowers (Million)
Direct loans 1,163.3 34.5
FFEL Loans 277.0 13.1
Perkins Loans 6.9 2.2
Total 1,447.1 43
Note that the totals may not give you the sum of Direct Loans, Perkins Loans, and FFEL loans because of the timing used for the data.
According to the table, subsidized and unsubsidized federal student loans occupy the bulk of the student’s outstanding debt. The two loans combined account for $767.7 billion. However, consolidated loans have the most dollars outstanding compared to the other federal loans. Interestingly, consolidation loans have fewer borrowers than unsubsidized and subsidized federal loans.
Federal Student Debt Based on Loan Type
Loan Type Dollars Outstanding (Billion) Number of Borrowers (million)
Stafford subsidized 276.8 29.7
Stafford unsubsidized 490.9 28.3
Stafford combined 767.7 33.3
Grad PLUS 89.8 3.6
Parent PLUS 89.8 3.6
Perkins 6.9 2.2
Consolidation 515.6 11.8
Private Student Loan Debt
Not everyone goes for a public student loan. Since you can find several federal loan types, some people prefer to go for a private student loan.
- The debt outstanding for a private student for graduate private loans and undergraduate loans is $113.2 billion (Q3 2017).
- The rate of total outstanding balance from private student lenders increases for undergraduates yearly.
- Overall, private student loan debt rose by over 20% since 2014.
The private student loan debt has risen yearly since 2014 since more students obtained loans from private lenders. It is interesting to note that the outstanding private student loan debt has risen by $21.4 billion.
Yearly Statistics for Private Student Loan Debt
Year Dollars Outstanding (billion)
Undergraduate debt accounts for most of the outstanding total private student loan debt. Furthermore, the debt percentage has consistently increased since 2009. Graduate students occupy less than 19% of private college debt in the United States.
Guidelines on Making Your Student Loan Decision
It would help to consider several things before selecting your student loan package. The type of loan you go for determines your student debt after you graduate from college. As a college graduate, you would not like to spend all your money on a student debt repayment plan. Thus, we have outlined several things you must consider before picking your student loan.
Determine the Amount of Money You Need
You need to know how much you require before you begin to look at our student loan options. It would be best to look at what you have in scholarships, grants, and family support before you apply for a student loan. Next, you need to consider the projected book and class costs, tuition costs, housing, and other logistics you’ll need to cover in college.
After looking at all these costs, how much will you need? You can subtract any funding in your possession from the total estimated amount. The remainder is the estimated amount you will need to borrow in student loans. Always ensure that you don’t borrow too much money in student loans such that you can repay your debt easily.
Fill Out the FAFSA Form
You must complete the Free Application for Federal Student Aid (FAFSA) form to get a student loan and financial aid options. The deadline for the application may vary depending on your state. Thus, it will help if you check the deadline at studentaid.gov. After completing the application, the body sends your information to your school. Next, you will get a letter telling you if you can access any loans and how much you can get.
Research Federal Loan Types
After completing your application, the letter from FAFSA will inform you which federal student loan options are available to you. There are several federal loan types you can consider, including:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
Subsidized are the best options for borrowers because the government pays for interest while you are in school through deferment periods. Undergraduate students can use direct subsidized student loans. The good thing about direct loans is that the government will also cover the interest rates six months after you leave school. Thus, you get to save a lot of money on interest.
Student loans include Federal Stafford Loans, Direct Subsidized Loans, and Federal Nursing Loans. You must demonstrate a financial need for you to receive a subsidized loan. The government calculates your financial needs based on income and family size. Additionally, the government considers your expected contribution to the family, academic level, and cost of education (including room, tuition, board, and books).
There’s, however, a limit to the amount of money you can access with subsidized loans. The limit in your first year in undergraduate school is $3,500, while the amount goes up to $4,500 in your second year. In the third year, students enrolled in college can access up to $5,500 in student loans. Note that graduate students cannot access direct subsidized loans.
Graduate students and undergraduates can access direct unsubsidized loans. One good thing with this loan type is that you do not need to demonstrate any financial need. Thus, you will get a loan irrespective of your median household income. You should note that, unlike direct subsidized loans, you must pay for the interest on your graduate school and undergraduate loans. An advantage is that you can choose not to pay the interest while in school. However, the interest will get added to your total loan amount.
Unsubsidized student loans include:
- Direct Unsubsidized Loans
- Unsubsidized Federal Stafford Loans
- Health Education Assistance Loans
- Direct PLUS Loans
- Federal Family Education Loan (FFEL) PLUS Loan Program
Before considering private lenders, you must always make direct federal loans your first option. Federal student loan options come with generous protection and benefits. For example, federal student loan borrowers can enjoy the student loan forgiveness program under the Public Service Loan Forgiveness Program. Additionally, you can enjoy an extended grace period compared to loans from private lenders. Federal student loan borrowers can enjoy the lowest debt rates and leverage the Income-Driven Repayment program. You should also note that Federal student loans have fixed interest rates with several repayment plans.
Check Private Loan Options
You can consider private loan options if the federal student loans fail to cover all your costs. Private lenders check your credit report to determine if you qualify for a student loan. Additionally, you may need to provide a co-signer before obtaining the loan.
Private student loans come from financial institutions like SoFi and do not have the same protections federal loan borrowers enjoy. You will not enjoy any loan forgiveness income-driven repayment. Additionally, you will not enjoy any grace period if you default on your payment. These private lenders offer fixed or variable rates and may not offer as many repayment options as those from public lenders. While private loans can help you pay for private and public colleges, you must consider their downsides. Always employ the services of a licensed financial professional if you do not understand the terms and conditions in the loan agreement.
Compare Costs and Options
The first thing you should consider when receiving your financial award letter is the amount you offer. You need to compare this amount with what you need and determine if it measures up. If it does not cover up, you can consider a private loan option if you cannot receive multiple federal loans. Among the federal and private loan options available to you, you should consider:
- Repayment term
- Interest rate
- Prospective monthly repayments
- Repayment options available
Always compare your interest rates with the total amount you borrowed. You can use an online calculator if you don’t know how to calculate these rates. Always check these rates to see how they affect the total loan cost. A good rule is never to borrow more than an average student. An average student borrows $32,731 in student loans.
Ensure to review any repayment terms available. Always check these terms on both federal and private loans to avoid issues in the future. You will automatically enroll in the Standard Repayment Plan if you go with a federal loan. The plan comes with a 10-year repayment term with many benefits. Additionally, you can change plans to something you prefer if you do not like the default plan.
Note that the repayment terms and interest rate on private loans may vary depending on the lender. Reviewing these points will help you get the best out of federal and private student loans.
Apply for the Loans
After considering all the student loans, and their terms and conditions, you can officially apply. You don’t need to do much for federal student loans since the FAFSA takes care of the application process. However, you will need to accept the loans on offer. It is quite different when you go for private student loans. You will have to present your tax and income information. Additionally, you will need to apply with a co-signer. Once you complete all the paperwork online, you can apply.
Sign an MPN
After applying for student loans, the next step is to sign an MPN (Master Promissory Note). The MPN is a legally binding document that states you will repay any federal loans you take. You may also have to sign something similar if you take a private student loan.
Conclusion: How Much Is An Average Student Loan?
We hope this article helps you better study the average student loan debt statistics and how federal student loan payments work. Always ensure to check when you need to make your first payment. Typically, you should enjoy an in-school deferment which ensures you don’t pay anything while in school. However, this agreement only works for federal loans. Private loans may not be as lenient and require you to repay your loan sooner.
You should also ensure to make your student loan payments on time. Additionally, only take private student loans when federal loans cannot cover your tuition and other costs. Note that student loans may not cover your auto loan. As we mentioned, getting financial aid, grants, and assistance from family members is better before obtaining any loan. These steps will ensure that your national student loan debt does not go overboard.
Lastly, ensure to ask questions where necessary to avoid future complications. Always consult a licensed financial advisor to get help if in doubt. Take out time to discuss these loan options and the duration you have to pay before picking your preferred choice.