If you think college is starting to feel like a luxury splurge, you’re not wrong. As of 2016, American undergrads are paying 28% more for college on average than they did a decade ago, and 65% more than they did 20 years ago, with those numbers adjusted for inflation.
That’s why many students and their parents are borrowing money for school. Chances are you currently have federal or private student loans, you’ll take them out in the future, or you at least know a lot of people who have them.
But even if you shell out loan payments every month, how much do you really know about student debt? After all, it can rank right up there with sex and religion as far as conversation topics no one wants to bring up.
Any idea which states have the highest student loan balances? Or how much Americans owe in total on their student loans? What about how common it is for people to stop making payments? We’ve gathered those answers and more, and the numbers may surprise you. If your student loan balance is your dirty little secret—or if you’re having trouble paying it off—rest assured that you are not alone!
Here are seven important facts about student loan debt:
1. Americans currently owe a combined $1.34 trillion on their student loans.
That was the cumulative student loan balance among American consumers as of June 2017. A decade ago, the figure was less than half as much: $514 billion . Student loans are now the largest form of consumer debt in the U.S. other than mortgages—exceeding car loans and credit card debt. It’s the only type of consumer debt that has grown since American borrowing peaked before the 2008 financial crisis.
2. Current student debt varies widely by state and college.
Average graduates’ likelihood of graduating with debt in 2016 ranged from 43% to 77% depending on state . Where as in 2015, around 68% of seniors at public and nonprofit colleges graduated with student loans.
That means the vast majority of young graduates are currently saddled with debt. However, the share of Americans with student loan debt between 2015 through the past decade actually hasn’t risen much. Back in 2004, 65% of graduates left school with debt.
3. The average student loan balance is around $34,000.
As the cost of college has increased, it’s no surprise that student debt has been rising as well. The average borrower today has around $34,000 in loans to pay off.
The average among Gen Xers—or those who are between 35 and 49 years old—is even higher at nearly $40,000. Young people between 18 and 20 owe less than $12,000 on average. That’s probably because they haven’t finished borrowing for school or don’t owe as much in interest yet.
4. The amount people owe varies widely.
As of 2016, a quarter of borrowers with a student loan balance owed $7,000 or less, while another quarter owed $43,000 or more, according to the Pew Research Center , which analyzed Federal Reserve Board data.
Even more shocking, around 7% of borrowers owe more than $100,000 – which equates out to an entire 1% of the country’s population.The variation largely has to do with different levels of educational attainment: Those who go to grad school are likely to owe more.
5. People who live in Washington, D.C., have the highest average student loan balances.
D.C. residents owe an average of $52,500 on their student loans, according to a 2017 report from Experian .
The runners up are Maryland, whose residents owe an average of $39,900, and Georgia, where the average balance is $38,700. On the other end of the spectrum, residents of North Dakota, South Dakota, and Wyoming have the lowest balances—all below $29,000 on average.
6. Americans with student debt have around four loans on average.
More than 13% of Americans have at least one student loan balance on their credit report, according to Experian. But they’re likely to be juggling a lot more than one: In fact, borrowers are paying off nearly four student loans on average. That’s a lot to handle!
Perhaps it’s no surprise then that the borrowers have at least one loan in deferment . That means payments are temporarily reduced or eliminated because the person is unemployed, experiencing economic hardship, is in school, or meets certain other criteria.
7. The number of borrowers defaulting on their student loans is at an all-time high.
As of 2016, a record 8.1 million Americans had stopped making payments on their federal student loans for at least nine months. That’s one out of six people who have federal student debt and the equivalent of the entire population of 38 states! “In spite of a booming stock market and falling unemployment, there is obviously a significant block of the labor force that is really struggling,”
Rohit Chopra, a senior fellow at the Consumer Federation of America, told Money magazine in March of 2017. So if you’re having trouble making payments, rest assured you are not the only one. Options like student loan refinancing and income-based repayment plans can help you get back on track.
SoFi Lending Corp. is Licensed by the Department of Business Oversight under the California Financing Law, license number 6054612.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.