If you’re wondering how your student loan balance compares, here are the facts: The average student debt among borrowers ranges from more than $30,000 to over $50,000, depending on the kind of loans you have. Those are significant numbers, no doubt. If you are feeling the weight of your debt, you are not alone. There are currently about 45 million borrowers whose loans totaled a whopping $1.77 trillion at last count.
When you have student loans, it can be natural to think about how it compares to, say, your cousin’s, your BFF’s or your coworkers’ debt. Especially when you are feeling stressed about making your payments and paying off what you owe. “Is everyone in the same boat?” you may ask yourself.
Knowledge is power, so read on to learn more about how student loans shape up for other Americans, as well as options for managing your debt. You’ll get through this!
Key Points
• Average balances: Federal loan borrowers owe ~$37K; private loan borrowers owe ~$55K; grad students often owe $75K+.
• Debt by demographics: Under-40s hold 55% of debt; women carry 66%; Black grads owe $25K more than White grads.
• By location: DC has the highest average ($54K+); North Dakota has the lowest (~$28K).
• Repayment reality: Average payoff time is 20 years; 7% of loans are in default; few eligible borrowers apply for forgiveness.
• Managing loans: Federal borrowers can explore IDR plans, forgiveness, or consolidation; private loan holders may consider refinancing.
What Is the Average Student Loan Balance?
There are different ways to look at the data on average student loan balances. Here, using intel from the Education Data Initiative, you’ll find some important statistics so you can see how your student loan balance may compare to others.
• The average federal loan debt is $37,338 per borrower.
• The average private loan debt is $54,921 per borrower.
• The average student borrows more than $30,000 towards their bachelor’s degree.
• 92% of borrowers with student loan debt have federal loans.
• The average graduate student loan debt is $76,620 among federal borrowers.
• For those with master’s degrees, the average debt is $83,651; among those with PhDs, the figure is $125,276.
• As for Parent PLUS loans, the average amount of debt is $29,528, according to the most recent years studied.
Are you curious about how debt aligns with age? Here are additional figures to know.
• Those borrowers age 30 have the highest average outstanding student loan debt, totaling $42,822 per person.
• 34% of those ages 18 to 29 have student loan debt.
• Borrowers under age 40 account for 55% of all student loan debt.
• Borrowers ages 40 to 49 owe 22% of America’s student loan debt balance.
Wondering how gender plays into student loan debt? Approximately 66% of debt belongs to women. The rest is borrowed by men. The data does not yet reflect nonbinary borrowers but will likely do so in the future.
If you are wondering how race correlates to student loan debt, these figures will shed some light on that angle:
• Black college graduates owe on average $25,000 more in student debt than White graduates.
• When checked four years after graduation, Black borrowers had student loan balances 188% higher than those of White borrowers.
• Asian college graduates are the fastest to repay their debt.
• Asian borrowers are also the most likely to earn a salary that exceeds their student loan balance.
Here’s a look at how student loan debt adds up by geographic location:
• Borrowers in Washington, DC, have the top spot in terms of their average federal student loan balance at $54,945.
• Borrowers in North Dakota have the lowest average federal student loan debt at $28,604. North Dakotans who take out these loans also have the distinction of living in the only state where borrowers have an average balance under $30,000.
• The state with the highest percentage of borrowers with student loan debt is Washington, DC (not exactly a state, but still) at 17.2%. Hawaii earns the honor of state with the lowest figure. Only 8.4% of residents have student loan debt.
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Other Student Loan Statistics
As you read these figures, you probably recognize that many other people are dealing with student debt, and considerable amounts of it in many cases. While you are thinking about how your student debt compares to others’, take a look at a few other interesting statistics:
• The average student borrower takes 20 years to pay off their loan debt.
• Some professional graduates can take more than 45 years to pay off all of their student debts.
• At any moment, an average of 7% of student loans are in default. That’s about 4 million loans going into default per year.
• In 2023, the amount of student debt that was forgiven was less than 1% of the total student loan debt balance.
Only 18.4% of eligible student loan borrowers apply for forgiveness.
Here’s something else to consider. If you’re getting ready to pay back what you owe or are already making your payments, you likely know how much you originally borrowed. But how can you tell what you owe with accumulated interest added on? Keep reading to learn more.
How to Check Your Student Loan Balance
Student loans come in two broad types, federal and private. Federal loans are either subsidized or unsubsidized. If it’s the former, then the government has been paying your interest while you’ve been in school. You only become responsible for interest when you’re no longer in college (and after your six-month grace period).
With unsubsidized loans, the interest will accumulate on the amount you borrowed while you’re still in school. You’re responsible for paying that interest from the moment your unsubsidized loan is disbursed.
Federal Student Loans
To find out what you owe in federal loans, you can check your federal student loan balance at StudentAid.gov. It will also show you how much of your loan balance is subsidized versus unsubsidized, along with other types of useful information.
You’ll need to create an account (if you haven’t yet done so) and use your FSA ID to log in and get the information you need.
Private Student Loans
For private student loans, you’ll need to contact the lender that gave you the funds to find out how much you owe. If you borrowed from more than one private lender, you’ll need to contact each one individually.
While federal loans typically come with a six-month grace period, check with each private lender, if applicable, to see if you have a similar grace period with them.
How to Manage Student Loan Debt
Once you know your total balance, then it’s time to figure out some strategic ways to pay back the balance. You want to still be able to enjoy postgrad life while eliminating those student loans.
Federal Repayment Programs
The federal government offers forgiveness programs, and, if relevant to your situation, you may get a portion of your remaining debt forgiven — meaning, you wouldn’t have to pay it back. It’s important to check to see which federal programs currently exist and see if you may qualify.
Some options to consider:
• While the Standard Repayment Plan is the typical default repayment plan offered by the federal government, there are different federal student loan repayment options available that can have longer terms — but you have to request one. If you choose an option with a longer term, this will likely lower your monthly payment, but increase the amount of interest you’ll pay over the life of your loan. You might look into the Graduated and Extended Repayment Plans offered for federal loans.
• A federal Direct Consolidation Loan can allow you to combine federal loans into one payment to lower the monthly amount due, simplify your personal finance management, and/or access federal forgiveness programs. (Note: This is not refinancing with a private lender; that will be covered in a minute.)
• There are also income-driven repayment plans for federal student loan balances where payments are capped, based on your income. There are likely qualifying factors you’ll need to know about. If you consistently make payments for a specified number of years, depending upon your modified agreement, any remaining balance could be forgiven. (One potential downside is that loan amounts forgiven under this program can be taxed as income by your state.).
The income-driven plans you may qualify for are:
◦ The SAVE Plan (this replaces the REPAYE plans and comes fully available on July 1, 2024)
◦ The PAYE Plan
◦ The Income-contingent Repayment Plan, or ICR
◦ The Income-based Repayment Plan, or IBR a minute.)
◦ You might also look into the Public Service Loan Forgiveness (PSLF) Program where people who work in public service occupations may qualify for 100% forgiveness after making 120 on-time, qualifying payments.
Among the qualifying requirements, you would need to be employed full-time at an eligible governmental agency (federal, state or local) or at another designated organization, such as a 501(c)(3) nonprofit (not religious).
💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.
Options for Private Student Loan Borrowers
If you have borrowed private student loans, sorry: None of the above options are available, nor can you refinance a private student loan with a federal one. But don’t feel discouraged, there are still repayment options.
• You can see what offers you qualify for from other lenders. Depending on such factors as your credit score and loan term, you might be able to get a deal you prefer with a different lender. In other words, you are refinancing private loans with another private loan. (Just keep in mind that when you refinance a loan for an extended term, you typically pay more interest over the life of the loan.)
• You might check with your employer and see if they offer any student loan repayment assistance. Some employers (though far from the majority) offer this as a benefit.
• If you are truly struggling to make your loan payments, you might talk to your lender about what flexibility there may be in terms of your loan’s interest rate and/or repayment term. Meeting with a nonprofit credit counselor who is knowledgeable about student loans can be another helpful step.
Student Loan Refinancing
You’ve just read about private student loans and possibilities for refinancing them. Earlier in this article, you also learned about federal Direct Consolidation student loans. There’s one other option that you may want to consider as you manage your student loans and work to pay them off: refinancing federal student loans with private loans.
In this case, your federal loans are paid off with funds from a new loan secured from a private lender, which hopefully offers a more manageable monthly payment.
Two important points:
• When you refinance a federal student loan with a private one, you forfeit federal benefits and protections, such as forbearance and forgiveness.
• If you refinance for an extended term, it could mean that you pay more interest over the life of the loan, though your monthly payments may be more manageable for your budget.
If you’re considering this path, it can be wise to spend a bit of time with an online student loan refinance calculator to see how different options might play out. That can help you get on the best path to being debt-free based on your own particular circumstances.
The Takeaway
Student loans are a fact of life for more than 45 million Americans, and repaying them can be a challenge. As you look at your debt and repayment plan, it can be helpful to see how you compare to others who are also carrying this kind of loan. Average balances are currently in the range of $35,000 to $55,000 per borrower (or higher), so you may find that your situation is similar to many of your peers’.
However, just because student debt is common doesn’t mean it’s easy to pay back. So consider your repayment alternatives carefully and find the right fit for your needs. While it takes focus and patience, you can find a path to be done with your student debt.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
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