It might be comforting to hear that you’re not the only person having trouble paying off student loans. The level of student loan debt held by Americans is worrying, and given that annual tuition increases by 8%, that debt is expected to keep rising. The second largest source of household debt, behind mortgages, is student loan debt. Americans have greater personal debt from college loans than from credit cards or auto loans.
Despite the high cost of attending college, having a degree is frequently required to compete in the job market. In fact, by the year 2027, it is predicted that postsecondary education would be necessary for 70% of all occupations in the American economy. Based on rising tuition costs and higher educational requirements for jobs it’s probable that student loan debt will continue to increase.
Average Student Loan Debt
As of Q4 2020, there were over 43.2 million students in the US who had student loan debt totaling $1.71 trillion. The total amount of outstanding student loan debt was $480.97 billion in the first quarter of 2006, more than tripling since that year.
The amount due on a student loan each month has also gone up. They increased by 50% between 2005 and 2016. An average monthly student loan payment today is between $200 and $299.
Older Borrowers and Student Loan Debt
Between 2005 and 2015, the number of adults 60 and older with student loan debt (including federal and private) doubled, going from 700,000 to 2.8 million. Consumers 62 and older owe $86.8 billion in federal student debt as of Q4 2020. Older borrowers have a lot of student loan debt because they’re helping finance their children’s and grandchildren’s college educations. In 2015, the CFPB estimated that more than 57% of co-signers were 55 and older.
Student Loan Delinquency Rates
As of Q3 2019, 10.9 percent of student loan debt was more than 90 days past due or in default, but thanks to provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that suspended payments while reporting all student loans as current, that percentage fell to 6.5 percent in Q4 2020. Positive trends can be seen in the decline in defaults and delinquencies.
The CARES Act gave debtors the critical student loan relief they needed, as well as a simple way for those who were falling behind to catch up.
Student loan delinquency rates based on degree status include:
- 40% of borrowers with student loans but no degree
- 15% of people who completed an associate’s degree
- 8% of those who completed a bachelor’s degree
- 6% of those with a graduate degree
Surprisingly, borrowers with higher student loan balances had lower default rates. Having more debt typically indicates a higher degree of education and, hence, greater earning potential.
Rates of delinquency based on the whole amount of outstanding student loan debt include:
- 21% among borrowers with less than $15,000 of outstanding debt
- 14% among borrowers with more than $15,000
States Where Student Loan Debt Is Highest and Lowest
Average student debt balances vary from state to state by as much as $30,000, according to a breakdown. With an average sum of $58,200, Washington, D.C. student loan borrowers had the highest debt, followed by those in North Dakota with a balance of $27,800.
Estimates from a collaboration between Equifax and the Federal Reserve Bank of New York are shown below:
| States With the Highest Average Debt per Student | |
|---|---|
| State | The average student loan balance |
| District of Columbia | $58,200 |
| Maryland | $42,500 |
| Georgia | $41,100 |
| Virginia | $38,100 |
| Florida | $37,900 |
| New York | $37,600 |
| Illinois | $37,300 |
| Oregon | $36,900 |
| Alabama | $36,800 |
| California | $36,800 |
| States With the Lowest Average Debt per Student | |
|---|---|
| State | The average student loan balance |
| North Dakota | $27,800 |
| South Dakota | $28,400 |
| Iowa | $29,600 |
| Wyoming | $29,700 |
| Wisconsin | $30,700 |
| Nebraska | $31,400 |
| Oklahoma | $31,400 |
| Montana | $31,700 |
| West Virginia | $31,800 |
| Arkansas | $31,900 |
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