A Breakdown of Average Student Loan Debt

A Breakdown of Average Student Loan Debt


  • Nearly 45 million Americans owe greater than $1.7 trillion in student loan debt.
  • Borrowers are delaying shopping for a house or beginning a household attributable to student debt.
  • Racial and gender disparities in student debt could drive bigger wealth inequities.

You could have heard that student loan debt is in disaster. Unfortunately, that is not an exaggeration. About 44.7 million U.S. debtors collectively owe greater than $1.7 trillion in student loans. And that quantity will increase by the day.

More than 30% of loan debtors are late of their funds, in default, or have stopped paying solely simply six years after graduating. Young debtors have more and more reported delaying plans to purchase a house, save for retirement, or begin a household attributable to student debt.

Despite requires motion from progressive lawmakers and coverage teams, President Biden has but to cancel any student loan debt by govt order. So for now, no less than, the burden of student loan debt continues to weigh on hundreds of thousands of Americans.

Breaking Down the Current Student Loan Debt

The quantity owed in student loan debt varies by sort of loan, reimbursement standing, plan, and servicer.

Loans in forbearance accounted for almost all of excellent student debt in the usas of September 2020, largely as a result of the federal government suspended necessary loan funds as a COVID-19 emergency reduction measure.

However, loans in reimbursement accounted for the most important portion of student debt earlier than the pandemic. In early 2020, $693 billion in loans have been in reimbursement, whereas solely $162.6 billion in loans have been in forbearance. Now, loans in forbearance make up 67% of excellent debt.

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Below is a breakdown of debt figures beneath the Direct Loan program as of the top of 2020. Loans beneath this program account for $1.32 trillion of the whole $1.7 trillion student debt load.

Loan Status Amount Owed Number of Borrowers
In reimbursement $14.7 billion 400,000
In deferment $114.4 billion 3.2 million
In forbearance $887.4 billion 22.2 million
In default $122.2 billion 5.5 million
In grace interval $43.7 billion 1.7 million

Source: Federal Student Aid

This desk excludes loans belonging to students presently at school and loans whose standing is unknown or thought-about “other.”

Average Student Loan Debt by Demographic

Much like with wages and wealth in America, there are clear racial and gender disparities in student loan debt. In some circumstances, loan debt disparities are so outstanding that some specialists theorize they might be a part of the trigger behind rising wealth inequalities within the U.S.

Black Borrowers Owe More Than Their White Peers

On common, Black graduates owe about $7,400 extra in debt than their white friends upon commencement. Four years after graduating, that hole practically triples to $25,000 and nearly half of all Black debtors (48%) owe greater than they borrowed after commencement in comparison with simply 17% of white debtors.

Black students are additionally more likely to take out federal loans to fund their undergraduate schooling than their white, Hispanic, Native American, and Asian counterparts.

During the 2015-16 tutorial yr, 71% of Black students used federal loans in comparison with 56% of white students, 50% of Hispanic students, 38% of Native Americans, and 31% of Asians.

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Black girls particularly tackle extra student loan debt than black males and some other racial or ethnic group. On common, they are going to borrow roughly $37,558.

According to the American Association of University Women, 57% of Black girls making funds towards their debt 4 years after graduating have been unable to cowl important bills. And throughout the first 12 years of reimbursement, Black girls’s loan debt grows on common by 13%.

Women Hold More Debt Than Men

Women of all racial and ethnic teams maintain nearly two-thirds of all student debt within the U.S. They account for roughly $929 billion of the nationwide $1.7 trillion whole. Just one yr after commencement, feminine debtors’ common debt is nearly 10% larger than male debtors’.

In addition to owing extra debt, girls are additionally extra prone to make larger month-to-month funds towards their debt, but it takes them about two years longer than males to pay it off. This is usually attributable to the truth that girls are inclined to have decrease incomes than males.

Graduate-Degree Holders Carry Large Share of Debt

Although the vast majority of debtors have affiliate levels or much less, households with graduate or skilled levels maintain the vast majority of student loan debt. This specific statistic has change into a part of the argument in opposition to student debt cancellation.

When Sen. Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer (D-N.Y.) proposed the cancellation of $50,000 in student loan debt per borrower, critics have been fast to level out that high-earning households and debtors with elite educations would doubtless profit essentially the most.

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However, a latest report by the Roosevelt Institute discovered the alternative to be true: the proposed plan “is progressive (and) would provide more benefits to those with fewer economic resources and could play a critical role in addressing the racial wealth gap.”

Where Debt Cancellation Is Now

President Biden didn’t instantly cancel student loan debt by govt order, however he has requested Education Secretary Miguel Cardona to judge the results of canceling as much as $50,000 of debt per borrower. For many, this provides an indication of renewed hope that debt cancellation is not fully off the desk.

As the await motion continues, some economists have concluded that the present $1.7 trillion debt steadiness won’t ever be paid off by debtors alone. In the meantime, practically 45 million debtors, a big section of whom are minorities, wrestle to strike a steadiness between making loan repayments and assembly their fundamental wants.


Feature Image: Peter Dazeley / Photodisc / Getty Images