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Tuition fees have steadily increased over the past 30 years. During this period, tuition at public four-year colleges increased from $4,160 to $10,740 and from $19,360 to $38,070 at private nonprofits (adjusted for inflation). As costs have increased, so has the need for student loans and other forms of financial assistance.
Today, more than half of the students leave school in debt. Here’s a snapshot of how much the average student borrows, what types of loans are most common, and how those loans are repaid.
Average student loan debt
- $1.75 trillion in total student loan debt (including federal and private loans)
- $28,950 average owed per borrower
- About 92% of all student debt is federal student loans; the balance is private student loans
- 55% of students from public four-year institutions had student loans
- 57% of students at private not-for-profit four-year institutions took on educational debt
Sources: Federal Reserve, The Institute for College Access and Success, College Board, MeasureOne
States with the highest and lowest average student debt
Source: The Institute for University Access and Success
Federal student loan portfolio
Federal student loans make up the majority of America’s educational debt — about 92% of all outstanding student loans are federal debt. The federal student loan portfolio currently stands at more than $1.6 trillion, owed by approximately 43 million borrowers. This is how this debt breaks down by loan type.
Source: Federal study grant
Federal student loans by age
Not surprisingly, younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in government student loans — the majority of people in this age group owe between $10,000 and $40,000.
However, people bear their educational debt well into middle age and beyond. Borrowers ages 35 to 49 owe more than $620 billion in student loans. This cohort has the highest number of borrowers owing more than $100,000 in loans.
Even retirees are feeling the pressure of student loans; There are 2.4 million borrowers age 62 and older who owe $98 billion in student loans.
Source: Federal study grant
Private student loan portfolio
- $131 billion in outstanding private student loan debt
- Only 7.6% of all educational debt comes from private student loans
- 89% of private loans are owed for bachelor’s degrees; 11% is owed for graduate school
- 92% of student personal loans are co-signed, 66% of graduate personal loans required a co-signer
- Essentially all private loans (99.9%) require school certification, a process by which the school confirms the borrower’s student status and cost of attendance
Student Loan Repayment Statistics
Student loan payments have been turned on their head since the start of the Covid-19 pandemic. As of March 2020, federal student loan payments have been on hold statewide, and the majority of federal loans are currently on deferral.
As of early 2020, just 2.7 million borrowers had their federal loans on hold. That number had shot up to 24 million borrowers by the end of 2021. However, that deferral is set to expire in May 2022, when federal student loan payments are expected to resume.
Here you will find the current repayment statuses of the federal direct loan program.
Private student loans, on the other hand, did not receive widespread deferral options during the pandemic. The majority of private student debt is actively being repaid. As of the third quarter of 2021, 74% of personal loans were in repayment, 17.5% were on deferred terms, 6% were in a grace period, and 2.4% were in forbearance.
Sources: BAföG, MeasureOne
The government student loan system offers a variety of repayment options for borrowers to choose from. Some plans require borrowers to qualify based on income and family size, but other plans are available to everyone.
Here’s how the federal loan portfolio breaks down into the most popular repayment plans.
Personal student loans do not have standardized repayment schedules – your options are determined by your particular lender. However, many private lenders offer at least a few plans to choose from. It’s common to have a choice of only making interest payments at school, making small lump sum payments during school years, or deferring all payments until after graduation.
After closing, most private lenders require you to make full payments spread evenly over your repayment period.
Sources: federal study grant
default and late payment
About 5% of student debt was at least 90 days past due or delinquent in Q4 2021. But that number is artificially low – federal loans currently on deferral due to Covid-19 are reported by the Department for Current Education. Once regular payments resume, a portion of the paused loans will be reported as defaulted.
In the table below, historical data illustrates the number of borrowers who have defaulted or defaulted on their direct federal loans. Direct loans are considered in default after 270 days of non-payment. Coverage between 2020 and 2021 is incomplete due to Covid-19 leniency.
If you look at private student loans, delinquency and delinquency rates have been steadily declining over the past decade. Here are historical default rates for private student loans, listed as a percentage of loans that have been repaid.
﹡Data for 2021 refer to the third quarter
Sources: Federal Reserve Bank of New York, Federal Student Aid, MeasureOne
Student loan forgiveness
As of September 2021, 10,776 borrowers have successfully had their federal loans forgiven under the Public Service Loan Forgiveness (PSLF) program. More than $1 billion has been forgiven, with the average applicant paying about $95,000 in debt. Another 1.3 million borrowers could be eligible for PSLF in the future, equating to about $132 billion in debt.
Between November 9, 2020 and September 30, 2021:
- 678,373 PSLF forms were submitted.
- Most of the employment certification forms were approved – 99.7% met the employer’s requirements.
- Almost all PSLF forms (98%) were rejected because the applicant did not meet the requirements. The most common reason for rejection was that the applicant had failed to make 120 qualifying payments on their direct loans.
Sources: federal study grant