There is no doubt that the subject of student loan debt has become incredibly contentious over the last few years.
The U.S. Department of Education has once more extended a pause on student loan payments in light of the ongoing Covid-19 pandemic. Before we dive into ways to address student loan debt, let’s take a look at the big picture.
The average cost of full-time college at a four-year institution (tuition, fees, room, and board) in 1980 was $3,167 for one year, or $9,307 (adjusted to 2019-20 dollars). The average cost in 2019-20 was $25,281. See HERE for a further year-by-year breakdown, which also includes tables differentiating private and public institution costs.
Student loan debt in the US totals $1.747 trillion. In a regular year, the total debt grows 6 times faster than the nation’s economy (like everything else, the pandemic has affected this rate in 2020-22). The U.S. Department of Education holds 92% of outstanding student loan debt, totaling over $1.611 trillion.
43.4 million people have federal student loan debt. The average federal student loan debt balance is $37,113, or potentially as high as $40,904, including private loan debt. The average public university student borrows $30,030 to attain a bachelor’s degree. The average interest rate for federal student loans is 4.12%, and 5.8% when factoring in private loans.
It is projected that for 2021 graduates, it will take the average four-year undergraduate degree borrower 7-9 years to pay off their loans, and the average graduate degree borrower 13-18 years. The average doctoral degree borrower will take 13-38 years.
Unlike other kinds of loans, it is extremely difficult to have these loans discharged due to bankruptcy. The U.S. Student Aid website says one may have some or all of one’s loans forgiven only if paying them off will leave a borrower unable to maintain a minimal standard of living, among other qualifications.
It is possible to chip away at student debt over time. Consider enrolling in autopay to ensure your monthly payments are made. Check to see whether your company has any programs to help pay employees’ student loans. You can also refinance your loan to secure a lower interest rate (though note that this path may entail a shorter repayment period and bigger monthly payments). Click HERE for additional strategies to help pay off student debt more quickly.
MeasureOne Research and News-Private Student Lending | Research Report
Student Loan Debt Statistics [2022]: Average + Total Debt (educationdata.org)
MeasureOne Private Student Loan Report Q3 2021 (hubspotusercontent00.net)
Average Student Loan Interest Rate [2022]: New & Existing Loans (educationdata.org)