Delving into Student Debt Statistics
- Total student loan debt reached $1.77 trillion as of Q2 2023, rising over 1.25% from Q2 2022.
- In the 2021-22 academic year, undergraduates borrowed $94.7 billion in new federal and private loans.
Loan Types and Percentage Breakdown
- 46% of this new borrowing came through unsubsidized Stafford loans. Graduate PLUS loans accounted for another 13%.
- 54% of 2021 bachelor’s degree recipients graduated with student debt, averaging $29,100 per borrower.
- The federal loan portfolio included $1.45 trillion in Direct Loans and $195 billion in FFEL loans in Q2 2023.
Repayment and Delinquencies
- Over 35 different federal loan repayment plans now exist, illustrating program complexity.
- The number of borrowers in income-driven plans has ballooned from 1.1 million in 2013 to 9.8 million by late 2022.
- Student loan delinquencies remain elevated despite repayment pauses. 5% of federal borrowers were 90+ days delinquent in Q2 2023.
- Women hold nearly two-thirds of all student debt, averaging balances $1,800 higher than men.
- Average debt at graduation ranges from $18,350 at public colleges to $32,500 at private non-profit colleges.
- Over 60% of student debt is held by borrowers under 40. But balances are growing fast for those over 60.
- Federal student loans account for 92% of the total $1.77 trillion debt crisis.
- Loan dependence begins early, with over half of graduates taking debt.
- Debt burdens fall heaviest on women and borrowers of color.
Private Loan Trends by LendEDU
- Approval rates remain low, averaging just 21.61% across all applicants in 2020.
- Average funded loan amounts edged up to $11,729 in 2020.
Federal Response and Initiatives
- The CARES Act provided relief by suspending loan payments and interest from March 2020 through December 2022.
- The Biden administration sought to cancel up to $20,000 in federal loans per borrower.
- Biden recently extended the payment pause through 2023 and proposed a new income-driven “SAVE” repayment plan.
Public Service Loan Forgiveness
- Only 2.5% of PSLF applications have been approved since inception.
- Just over $10 billion in loan balances have been forgiven under PSLF through March 2023.
The Root Causes
- College tuition and fees have dramatically outpaced inflation over the past 30 years.
- For example, average annual tuition at public 4-year colleges rose from $4,160 in 1989 to $10,740 in 2019 (in 2019 dollars).
State Funding and Family Income
- Per-student state spending on public higher education declined by about 20% per full-time student from 1987 to 2017.
- Median household income has barely budged since the late 1980s after adjusting for inflation.
For-Profit Colleges and Funding Limits
- Enrollments boomed at for-profit colleges in the 1990s and 2000s.
- Federal Pell grants now cover only about 28% of the average costs at 4-year public colleges.
- Board of Governors of the Federal Reserve System (Fed), Consumer Credit – G.19
- U.S. Department of Education (ED) Office of Federal Student Aid (OFSA), Federal Student Loan Portfolio
- PRNewswire, Latest MeasureOne Data Confirms Private Student Loan Market Returning to Pre-Pandemic Norms
- National Center for Education Statistics (NCES), The Integrated Postsecondary Education Data System
- Morning Consult National Tracking Poll
- The College Board, Trends in Higher Education
- MeasureOne, Private Student Loan Report
- Fed, Report on the Economic Well-Being of U.S. Households
- Federal Reserve
- Enterval Analytics
- Federal Reserve Bank of New York
- Federal Student Aid (here and here)
- NCES, Digest of Education Statistics
- ED, White House Initiative on Educational Excellence for African Americans
- Federal Reserve Bank of New York, Center for Microeconomic Data
- U.S. Bureau of Labor Statistics, Consumer Price Inflation Calculator
- Pew Research Center, 5 Facts About Student Loans
- Congressional Budget Office, Budget and Economic Data
- ED OFSA, Loan Forgiveness Reports
- ED OFSA, 3 Ways to Spot Student Loan Scams
- United States Department of Commerce Bureau of Economic Analysis, Gross Domestic Product
- Federal Student Aid: Official Cohort Default Rates for Schools
- CFPB Steps Up Scrutiny of Student Loan Servicers That Deceive Borrowers About Public Service Loan Forgiveness
- The Rise and Fall of For-Profit Higher Education