Borrowers in the U.S owe $1.64 trillion of student loan debt. For borrowers with federal student loans, the average student loan debt in America is $35,397 according to the most recent data from December 2019 according to the Department of Education.
Student loans surpass all other forms of 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’re breaking down the average student loan debt as well as other student loan debt statistics for you to help you understand the student debt landscape.
Average student loan debt facts
Looking at student loan debt statistics can give context to the student loan crisis and the financial reality for many college graduates. You’ll learn how many people have student loan debt, how many are falling behind on payments and more. Here are some of the overall statistics about student loan debt worth noting:
- Federal student loan borrowers: 42.8 million
- Total student loan debt: $1.64 trillion
- Student loan delinquency rate: 10.8 percent
- Graduates with student loan debt: 65 percent
- Average student loan debt for class of 2018: $29,200
- Average monthly student loan payment: $393
- Median monthly payment: $222
As you can see from these student loan debt statistics, more students graduate college with student loans than not. The Institute for College Access and Success (TICAS) found that 65 percent of students who graduated in 2018, from both public as well as private nonprofit colleges, had student loan debt.
The Institute also found the average student loan debt for the class of 2018 was $29,200.
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 covers a range of information, including the amount of outstanding student loan balances. As of August 2019, outstanding student loan balances stood at $1.48 trillion dollars.
Additionally, the Household Debt and Credit report includes the rate of delinquency, which is 10.8 percent. It defines that 10.8 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.
Your student loans are only considered to be in default, however, after 270 days of no payments. That’s nine months of time.
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 and 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.
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
We calculated the average federal student loan debt for each state according to data from the Department of Education.
- State with the highest average student loan debt in December 2019: Maryland, $41,460
- State with the lowest average student loan debt in December 2019: North Dakota, $27,677
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, such as:
- Student loan forgiveness on income-driven repayment plans if there’s an outstanding balance after the repayment period
- Public Service Loan Forgiveness (PSLF)
- Teacher Loan Forgiveness
- Total and Permanent Disability Discharge
These programs are still relatively new, and 2018-2019 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 June 2019).
- Number of applications for PSLF: 110,729
- Individual borrowers who submitted applications for PSLF: 90,962
- Applications that have completed processing: 102,051
- Applications approved by PSLF servicer: 1216
- Borrowers who had loans discharged: 845
- PSLF applications rejected: 100,835
- Total balance discharged through PSLF: $52,045,282
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, have bachelor’s degrees or who have dropped out — 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.”
Additionally, 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 such options.
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 three 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 that pursue higher education. According to the same class of 2018 report by TICAS:
- 21 percent of black student loan borrowers with a bachelor’s degree 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 whose parents 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 data that proves otherwise.
What’s interesting to note is that since 2015, the cumulative amount of loans in default has doubled while the default rate is going down. In Q1 2015, the amount in default was $4.65 billion, and as of Q3 2019 that amount is $8.53 billion. Also alarming is that the amount of loans has increased by more than $100 billion in just two years, from $553.5 billion in repayment in Q3 2017 to $672.5 billion in repayment in Q3 2019.
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. The information below is for Direct Loans as of Q3 2019.
- Current Repayment: $687.7 billion
- Borrowers in current repayment: 18.9 million
- Delinquent (31-90 days) amount: $39.2 billion
- Delinquent (31-90 days) borrowers: 1.29 million
- Delinquent (91-180 days) amount: $25 billion
- Delinquent (91-180 days) borrowers: 0.88 million
- Delinquent (181-270 days) amount: $13.7 billion
- Delinquent (181-270 days) borrowers: 0.51 million
- Delinquent (271-360 days) amount: $7.3 billion
- Delinquent (271-360 days) borrowers: 0.29 million
- Cumulative amount in default: $115.1 billion
- Borrowers in default: 5.4 million
- Loan amount sent to collections: $1.4 billion
- Number of borrowers with debt in collections: 0.06 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 2019.
- Outstanding Direct Loans in deferment: $123.1 billion
- Direct Loan borrower in deferment: 3.4 million
- Outstanding Direct Loans in forbearance: $122.1 billion
- Direct Loan borrowers in forbearance: 2.7 million
Source: Federal Student Aid ‘s Loan Portfolio
Federal student loan data
Many different types of federal student loans 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 2018 from the Federal Student Aid’s Loan Portfolio.
- Outstanding Direct Loans: $1.2 trillion
- Direct Loan borrowers: 34.3 million
- Outstanding FFEL Loans: $266 billion
- FFEL Loan borrowers: 12.4 million
- Outstanding Perkins Loans: $6.3 billion
- Perkins Loans borrowers: 2.1 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: $277.4 billion
- Stafford Subsidized Loan borrowers: 29.1 million
- Outstanding Stafford Unsubsidized Loans: $504.2 billion
- Stafford Unsubsidized Loan borrowers: 28.3 million
- Outstanding Grad PLUS Loans: $71.9 billion
- Grad PLUS loan borrowers: 1.3 million
- Outstanding Parent PLUS Loans: $92.9 billion
- Parent PLUS loan borrowers: 3.5 million
- Outstanding Consolidation Loans: $528.4 billion
- Consolidation Loan borrowers: 11.8 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): $170.3 billion
- Borrowers on IBR: 2.78 million
- Outstanding Loans on Income-Contingent Repayment (ICR): $32.7 billion
- Borrowers on ICR: 0.7 million
- Outstanding Loans on Pay As You Earn (PAYE): $93.4 billion
- Borrowers on PAYE: 1.37 million
- Outstanding Loans on Revised Pay As You Earn (REPAYE): $161.4 billion
- Borrowers on REPAYE: 2.80 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 loans that are private. This data is from MeasureOne from the June 2019 private student loan debt report:
- Private student loan balance: $66.07 billion
- Private student loan percentage for undergraduates: 88.15%
- Private student loan percentage for graduate students: 11.85%
- Private student loan in repayment: 75.37%
- Private student loan debt in deferment: 20.02%
Student loan debt statistics
As you can see from these student loan debt statistics, student loan debt is a concern for many people. Who it affects and how it affects them, however, varies greatly depending on the 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 experiences. At Student Loan Planner, we’re committed to telling those stories and empowering borrowers with information and assistance to learn how to pay off their student loan debt.