Student loan debt stands at $1.748 trillion in 2022. About 69% of undergraduates borrowed student loans in 2019 and graduated with an average debt of $30,062. This includes both federal and private student loans. Parents are also not left behind.
But the situation has changed a lot.
The outstanding federal loan balance is $1.620 trillion and accounts for 92.7% of all student loan debt.
|Highest debt states||Lowest debt states|
Source : The Institute for College Access and Success
|Direct loans||$1.38 trillion||37.2 million borrowers|
|FFEL loans||$225.7 billion||9.9 million borrowers|
|Perkins loans||$4.2 billion||1.5 million borrowers|
|Total (all federal)||$1.61 trillion||43.4 million unduplicated borrowers|
|Stafford subsidized||$290.9 billion||30.1 million borrowers|
|Stafford unsubsidized||$562.5 billion||30.1 million borrowers|
|Stafford combined||$853.4 billion||34.3 million unique recipients|
|Grad PLUS||$90.6 billion||1.6 million borrowers|
|Parent PLUS||$104.8 billion||3.7 million borrowers|
|Perkins||$4.2 billion||1.5 million borrowers|
|Consolidation||$553.3 billion||11.2 million borrowers|
Data resource - https://studentloanhero.com/student-loan-debt-statistics/
According to the type of school a student attends, here is a deeper look at how they incur debt:
(Data via CollegeBoard and the Institute for College Access and Success)
Understandably, younger folks are the ones that owe the most on their school loans. About $500 billion in federal student loans are held by borrowers between the ages of 25 and 34; a large %age of these borrowers owe between $10,000 and $40,000.
But people continue to carry their student loan debt far into their middle years and beyond. More than $620 billion in student loan debt is held by borrowers aged 35 to 49. The majority of the borrowers in this cohort had debt balances of greater than $100,000.
Even retirees are affected by student loan debt since there are 2.4 million borrowers who are 62 years of age or older and owe $98 billion in student loan debt.
|Age group||Amount owed||Number of borrowers|
|24 or younger||$110 billion||7.6 million|
|25 to 34||$500 billion||N14.9 million|
|35 to 49||$622 billion||14.4 million|
|50 to 61||$282 billion||6.4 million|
|62 and older||$98 billon||2.4 million|
Age-wise graphical representation of student loan debt
Student loan debt statistics (as of july 2022)
While the overall amount of student loan debt will still increase in 2022, the pace of growth each year has steadily decreased over the previous ten years.
Data source - educationdata.org
The federal government intervened to ease student loan repayment during this period of high unemployment and financial turmoil, beginning with the Coronavirus Pandemic in early 2020. The federal government decided to momentarily forbear all federal student loans to save college graduates money.
This indicated that all payments for federal student loans were paused in their entirety. This was planned to end in January 2022. To offer graduates more time to resume their repayment plan, the Biden administration moved the deadline to May 1, 2022. Federal student loans would not collect interest or demand monthly repayments from borrowers during this deferment period.
The process of forgiving student loans seems complicated by murky procedures and mistakes. Often, borrowers are not aware that they qualify for student loan forgiveness. Additionally, loan servicer incompetence or inaccurate information results in denials for borrowers who ought to be eligible.
Media outlets started receiving more complaints regarding student loan debt scams in late 2020. Such allegations are prevalent in desperate situations (read: carpetbagger), and the frauds will continue as long as there is a student debt issue.
Assurances of debt forgiveness are a common deception, as are offered for phony refinancing and consolidation that charge exorbitant up-front costs.
The US Department of Education cautions against ever requesting someone's FSA ID password. They utilize your FSA ID, which functions like an electronic signature, to sign legally binding papers online. Never allow anyone to create an FSA ID for you or give them your FSA ID password.
If you think you've been conned, take these instructions in order:
It was implemented to lessen the financial burden of the epidemic. A suspension on federal student loan payments and collection efforts was one of the provisions, and it is presently in effect until August 31, 2022.
According to the most recent report from the Federal Student Aid (FSA) Office in the United States, as of March 2022:
Data - https://educationdata.org/student-loan-debt-statistics
Borrowers have the option of deferring or forbearing payments if they are unable to make them. Although interest accrues typically during these times, borrowers with subsidized loans are not responsible for the interest that builds up while the loan is in deferral.
2020 saw a significant increase in the number of debtors in forbearance as a result of the government's student loan relief program. Additionally, delinquency and default reports have been temporarily stopped by the Office of Federal Student Aid.
Private student loan repayments may also be delayed through deferment or forbearance, although interest will continue to accumulate whether or not payments are made.
In the fourth quarter of 2021, almost 5% of student debt was at least 90 days past due or in default. The Department of Education reports federal loans presently in forbearance because of COVID-19 as current, which artificially lowers the number. A part of the paused loans will be listed as defaulted once regular payments begin.
The historical data in the table below shows how many borrowers are in default or overdue on their Direct federal loans. Two hundred seventy days of unpaid debt on a direct loan is the default.
|Year||31-90 days late||91-180 day late||181-270 day late||271-360 day late|
|2013||1.29 million||0.77 million||0.43 million||0.31 million|
|2014||1.25 million||0.84 million||0.46 million||0.34 million|
|2015||1.27 million||0.83 million||0.54 million||0.37 million|
|2016||1.3 million||0.88 million||0.49 million||0.35 million|
|2017||1.27 million||0.89 million||0.54 million||0.37 million|
|2018||1.35 million||1.08 million||0.59 million||0.32 million|
|2019||1.31 million||0.91 million||0.54 million||0.34 million|
The rates of default and delinquency for private student loans have been declining over the previous ten years. Here are the past private student loan delinquency rates for loans that were currently being repaid.
|Year||30-90 days late||90+ days late|
*2021 data is as of the third quarter
Source : Federal Reserve Bank of New York, Federal Student Aid, MeasureOne
Student loan forbearance is not a permanent solution to eliminate debt, especially if your debt amount is high. Again, if you have private student loans, there is no respite.
So, what should you do? Well, you can repay the debt as much as you can during the forbearance period and avoid paying the interest.
As mentioned, the federal government has paused interest payments until September 2021. So, you do not have to pay interest. The principal amount will also go down fast. This will help you get out of student loan debt faster. Consider this forbearance period a golden opportunity to become debt-free as soon as possible.
To pay off student loan debt (private), or if you require further help like budgeting or debt counseling, you can call (800)-530-OVLG.
Student loan debt cancelation due to fraudulent activities.
The Biden administration will forgive the debts of students who colleges misled. If students show that colleges have deceived them regarding loans or education services, they may receive total loan discharges.