Got student loan debt? You’re not alone. In fact, there are 44 million student loan borrowers in the U.S. What’s even more interesting is that student loan debt surpasses all other forms of household debt in the U.S. aside from housing debt.
You’d expect mortgages to be the top form of debt but when it comes to student loans, they’re a close second, surpassing credit card debt, auto loan debt, and other consumer debt.
Given the prevalence of student loan debt and the emergence of student loan forgiveness programs, we thought we’d break down the average student loan debt as well as other student loan debt statistics.
Average student loan debt facts
Looking at student loan debt statistics can help paint a picture and give context to the student loan crisis. To start, we’ll look at the growth of student loan debt over time in the United States since 2003. Below that, you’ll see other stats on payments, delinquency, number of student loan borrowers, and more.
Student loan borrowers: 44 million
Total student loan debt: $1.46 trillion
Student loan delinquency rate: 11.5 percent
Graduates with student loan debt: 65 percent
Average student loan debt for class of 2017: $28,650
Average monthly student loan payment: $393
Median monthly payment: $222
As you can see from the student loan debt statistics above, more students graduate college with student loans than not. It is the Institute for College Access and Success that found that 65 percent of students who graduated in 2017, from both public as well as private nonprofit colleges, had student loan debt.
This number was a one percent increase from the previous year. They also found the average student loan debt for the class of 2017 was $28,650.
When it comes to total student loan debt, the Federal Reserve Bank of New York along with the Center for Microeconomic Data tracks levels of debt each quarter. Their quarterly report on Household Debt and Credit includes a wide range of information, including the amount of outstanding student loan balances. As of September 30, 2018, outstanding student loan balances increased $37 billion to $1.44 trillion dollars.
Additionally, the Household Debt and Credit report includes rates of delinquency, which is 11.5 percent. They define that 11.5 percent as the aggregate debt that is more than 90 days delinquent or in default. This can be somewhat confusing as there is a difference between delinquency and default.
Student loan delinquency is when you miss a payment. So if you don’t make a payment by the due date, your student loans are considered delinquent.
However, your student loans are only considered to be in default after 270 days of no payments. That’s nine months of time, so it’s important to differentiate between a payment that can be a few days late with something that is nine months late or more.
This is an important distinction as being in default has much more serious consequences than delinquency. When your loans are in default, your wages can be garnished, any tax returns can be garnished, your bills will be sent to collections and your credit could take a serious hit.
The Federal Reserve’s Report on the Economic Well-Being of U.S. Households stated the average student loan monthly payment is $393 while the median payment is $222.
A little refresher, the ‘average’ is all of the monthly student loan payments combined, divided by the amount of borrowers. The median is the middle number when you list all monthly payments from lowest to the highest monthly payment in ascending order.
Given that some borrowers have steep payments from large balances and some borrowers have low payments due to income-driven repayment plans, these numbers can be a bit skewed.
Now that we have a basis for today’s average student loan debt statistics, let’s take a close look at student loan forgiveness.
Student Loan Statistics By State
Highest student loan debt of any region: District of Columbia $51,742
State with the highest average student loan debt: Maryland: $39,184
State with the lowest average student loan debt: North Dakota, $27,284
How Many Six Figure Borrowers Exist in Each State?
Another way to look at the severity of the student loan crisis is to see what proportion of student loan borrowers owe more than $100,000 in student debt. Here’s that data below.
Student loan forgiveness
There are various different student loan forgiveness programs for federal student loan borrowers. There is student loan forgiveness on income-driven repayment plans if there’s an outstanding balance after the repayment period. On top of that, there’s Public Service Loan Forgiveness and Teacher Loan Forgiveness as well as Total and Permanent Disability Discharge.
These programs are still relatively new and this past year was the first year that the original cohort of borrowers who pursued Public Service Loan Forgiveness were eligible for student loan forgiveness. Let’s a closer look at some of the recent data (as of 6/30/18).
Number of applications for PSLF: 32,601
Individual borrowers who submitted applications for PSLF: 28,081
Applications that have completed processing: 28,913
Applications approved by PSLF servicer: 289
Borrowers who had loans discharged: 96
Denied applications due to not meeting requirements: 20,521
Denied applications due to incomplete information: 8,103
Amount of loans discharged through PSLF: $5.52 million
Source: Federal Student Aid PSLF Report
These numbers have recently created a media frenzy with 99 percent of borrowers who applied for PSLF rejected. The numbers are discouraging for student loan borrowers hoping to get student loan forgiveness through PSLF.
As you can see from the information above, the majority of the applications were denied because they did not meet the program requirements. Though it doesn’t state what that means — whether it’s eligible employment or borrowers on the wrong repayment plan, etc. A smaller number of applications have been denied because of missing information.
If you want to go this route, be sure to complete your Employment Certification Form each year and see if your employer and type of loans qualify for PSLF.
Default and delinquency
Though there are billions of dollars in default, the numbers are skewed heavily toward a certain demographic. You would think that borrowers with a higher student loan balance may be more at risk for default. But that’s not the case.
As you can see below, data provided by the Brookings Institution illustrates that the lion’s share of borrowers who default owe $10,000 or less.
Source: The Brookings Institution
On the other hand, borrowers with high balances, such as more than six figures, are the least likely to default on their student loans. How does this happen? Graduate students are the ones who are typically saddled with high student loan balances. They are also more likely to be higher earners too.
It’s the borrowers who have smaller balances — those who may have associate’s degrees or who have dropped out, or have bachelor’s degrees — that are more likely to default.
According to the New York Times, “Defaults are concentrated among the millions of students who drop out without a degree, and they tend to have smaller debts. That is where the serious problem with student debt is. Students who attended a two- or four-year college without earning a degree are struggling to find well-paying work to pay off the debt they accumulated.”
In many cases, graduate students may be more educated about the student loan process and end up on an income-driven repayment plan to avoid default. Those who have dropped out or did not complete a degree may not be as familiar with the options available, on top of struggling to find work to pay back their loans.
These default student loan debt statistics, however, are misleading and can give the wrong impression.
“The government focused exclusively on default rates to punish schools, and sometimes looks at the percent of students paying down principal within 3 years,” said Travis Hornsby, founder of Student Loan Planner. “But they don’t look at it for graduate school programs at all and the grad students are informed enough to sign up for Income-Driven Repayment and not default, so it makes grad schools look like great investments.”
Aside from default being more likely a reality for borrowers with smaller balances, default is unfortunately more likely for certain populations too. According to the same class of 2017 report by the Institute for College Access and Success:
- 21 percent of Black student loan borrowers with a bachelor’s entered default within 12 years (compared to 3 percent of white borrowers and 8 percent of Hispanic or Latino borrowers)
- Pell Grant recipients were five times more likely to enter default within 12 years, compared to student loan borrowers with higher incomes
- Students who are the first in their family to go to college are twice as likely to default compared to students who had parents who have a degree
- 30 percent of borrowers who went to a for-profit college entered default within 12 years — more than seven times the rate for borrowers who went to public colleges (4 percent)
So when we think of the student debt crisis and immediately correlate high balances with high default rates, we’re running against the data that proves otherwise.
What’s interesting to note is that in the past five years, the cumulative amount of loans in default has tripled while the default rate is going down. In 2013, the amount in default was 30.5 billion dollars and in 2018 that amount is 97 billion dollars. More alarming stats show that the amount of loans in default has increased nearly 35 billion dollars in just two years.
There is a difference between delinquency and default though. In order to become delinquent, you miss your due date. You enter default after 270 days.
Below we cover how many borrowers are in current repayment, including the student loan amount, then share the data related to delinquency and default at specific intervals. Please note that the information below is for Direct Loans as of Q3 2018.
Current Repayment: $540.5 billion
Borrowers in current repayment: 15.24 million
Delinquent (31-90 days) amount: $43.3 billion
Delinquent (31-90 days) borrowers: 1.53 million
Delinquent (91-180 days) amount: $26 billion
Delinquent (91-180 days) borrowers: 0.98 million
Delinquent (181-270 days) amount: $12.5 billion
Delinquent (181-270 days) borrowers: 0.50 million
Delinquent (271-360 days) amount: 6.8 billion
Delinquent (271-360 days) borrowers: 0.29 million
Cumulative amount in default: $97 billion
Borrowers in default: 5.0 million
Loan amount sent to collections: 1.0 billion
Number of borrowers with debt in collections: 0.05 million
Deferment and forbearance
Deferment and forbearance options can help federal student loan borrowers avoid delinquency and default by putting payments on a temporary pause. The information below is for Direct Loans for Q3 2018.
Outstanding Direct Loans in deferment: $117.2 billion
Direct Loan borrower in deferment: 3.5 million
Outstanding Direct Loans in forbearance: $105.8 billion
Direct Loan borrowers in forbearance: 2.5 million
Source: Federal Student Aid ‘s Loan Portfolio
Federal student loan data
There are many different types of federal student loans that make up the federal student loan portfolio. We’re going to do a deep dive into the specifics regarding all the various types of loans as well as how many borrowers have those types of loans. This information is from Q3 of 2018 from the Federal Student Aid’s Loan Portfolio.
Outstanding Direct Loans: $1,116.0 billion
Direct Loan borrowers: 33.3 million
Outstanding FFEL Loans: $288.6 billion
FFEL Loan borrowers: 13.8 million
Outstanding Perkins Loans: $7.4 billion
Perkins Loans borrowers: 2.4 million
While those numbers are the general sums for those federal student loan categories, here are even more specifics by each loan type.
Outstanding Stafford Subsidized Loans: $274.2 billion
Stafford Subsidized Loan borrowers: 29.1 million
Outstanding Stafford Unsubsidized Loans: $477.8 billion
Stafford Unsubsidized Loan borrowers: 28.0 million
Outstanding Grad PLUS Loans: $63.9 billion
Grad PLUS loan borrowers: 1.2 million
Outstanding Parent PLUS Loans: $86.7 billion
Parent PLUS loan borrowers: 3.4 million
Outstanding Consolidation Loans: $501.9 billion
Consolidation Loan borrowers: 11.9 million
Source: Federal Student Aid’s Loan Portfolio
A good way to avoid delinquency and default — and to make loans more manageable is through income-driven repayment. However, there is information out there that not as many borrowers are taking advantage of this program. Let’s take a look at the numbers.
Outstanding Loans on Income-Based Repayment (IBR): $168.5 billion
Borrowers on IBR: 2.85 million
Outstanding Loans on Income-Contingent Repayment (ICR): $29.2 billion
Borrowers on ICR: 0.65 million
Outstanding Loans on Pay As You Earn (PAYE): $75.8 billion
Borrowers on PAYE: 1.24 million
Outstanding Loans on Revised Pay As You Earn (REPAYE): $129.2 billion
Borrowers on REPAYE: 2.34 million
Source: Federal Student Aid’s Loan Portfolio
Private student loan data
When it comes to statistics, most of the numbers are related to federal student loans. But the private student loan market isn’t exactly small. There are quite a number of private student loan borrowers and amount of loans that are private. This data is from MeasureOne from Q1 of 2018.
Private student loan balance: $67.12 billion
Private student loan percentage for undergraduates: 88.31%
Private student loan percentage for graduate students: 11.69%
Private student loan in repayment: 74.06%
Private student loan debt in deferment: 21.11%
Student loan debt statistics
As you can see from the student loan debt statistics, student loan debt is an issue for many people. However, who it affects and how it affects them varies greatly depending on context.
The numbers can provide a snapshot of where things are at with total student loan debt, but at the end of the day, it doesn’t tell the stories of individual borrowers and showcase their experience. At Student Loan Planner, we’re committed to telling those stories and empowering borrowers with information and assistance.
Did this help you better understand some of the student loan forgiveness programs?