At the end of 2020, the United States reached a new high of $1.7 trillion in student debt. It’s hard to conceptualize just how much $1.7 trillion is, but what we do know is that it’s really, really, really big.
How Many People are Impacted by Student Debt?
The $1.7 trillion in student debt is held by around 44.7 million Americans. This might seem like a lot, but it isn’t incredibly surprising when we consider the fact that in recent years, around 69% of college students took out student loans and graduated with an average of $29,900 in student debt, including federal and private debt.
How does this $1.7 trillion break down? Let’s see.
Federal vs. Private Student Loan Debt
Student loans are typically one of two types: federal or private. Federal loans are dealt by the government, and private student loans come from private lenders such as financial institutions and banks.
Federal student debt makes up about $1.57 trillion of the total student loan debt. This amount is spread across 42.9 million borrowers and various loan types.
Private student loans make up around $132 billion of the grand total.2 While this number is only a fraction of the federal loan debt, it’s important to remember that private interest rates tend to be much higher. Thus, this loan debt has just as much, if not more, of an impact.
Student Loan Debt By Degree Type
As of 2019, college graduates obtaining a master’s degree held the most debt. The following details the breakdown of which degrees held what percentage of the overall student loan debt.3
Associate’s Degree: 7%
Bachelor’s Degree: 29%
Master’s Degree: 36%
Professional/Doctoral Degree: 20%
Demographic Breakdown of Student Loan Debt
By Age
Believe it or not, the 25-34 years-old age group holds the most student loan debt. Here’s the breakdown:4
< Age 24: $115.5 billion (7.8 million borrowers)
25-34: $500.5 billion (14.8 million borrowers)
35-49: $601.7 billion (14.2 million borrowers)
50-61: $262.2 billion (6.2 million borrowers)
> 62: $86.8 billion (2.3 million borrowers)
Source: EducationData
By Race
When we break it down by race, we can begin to see some startling disparities.
Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates. That said, 54% of all student loan debt is held by White/Caucasian student borrowers. This means that even while holding less of the overall student loan debt, Black and African American college graduates still carry more in student loan debt.
Source: EducationData
Federal Student Loan Debt By Repayment Status
Federal student loans have more repayment options than private student loans, allowing us to see just how much of this debt is in repayment versus forbearance and so on.
As of January 2021, federal student loan debt was broken down the following way:5
$14.7 billion in repayment, across 0.4 million borrowers
$114.4 billion in deferment, across 3.2 million borrowers
$887.4 billion in forbearance, across 22.2 million borrowers
$43.7 billion in a grace period, across 1.7 million borrowers
Student Debt for the Public Service Loan Forgiveness Program
The Public Service Loan Forgiveness program (PSLF) grants eligible federal loan borrowers forgiveness on a portion of their loans after making 120 qualifying payments and working for a qualified employer. Borrowers in this program typically won’t throw lump sum payments at their debt as they know it will eventually be forgiven after making minimum payments.
This means that the debt levels for people in this program can look a bit different.
In total, there are around 1,378,000 borrowers in the PSLF program. The average balance forgiven is $76,906.6
One common trend amongst all of these categories is the fact that student loan debt is rising, and it’s rising steadily. Over the past few years, student loan debt has continued to jump by billions each year. Regardless of degree, program, age, or year, student loan debt is on the rise for us all.
Source: EducationData
Summary
This might sound scary, but we want you to know that if you’re reading this, you’re already ahead of the game. Being informed on what student debt looks like is a great place to start. Now, it’s all about making smart financial decisions when it comes to your loans. (fun fact: we’ve got you covered on that)