Student debt is a hot conversation topic among lobbyists, politicians, and college graduates. College tuition prices are skyrocketing, but students continue to enroll. With family income still stagnant since 2000, most students are left with no choice but to borrow. Borrowers now owe a cumulative $1.569 trillion dollars of student loan debt according to the U.S Federal Reserve. Has it always been this high? Who owes the most money? Below, we will break down and explain student debt statistics and trends.
Overview of Student Debt Statistics in the United States for 2019
Right behind mortgages, student debt comes in second when looking at consumer debt categories. It is higher than credit card debt and auto loans. Everyone knows it is a problem, but students want their shot at a college education. Check out these staggering student debt statistics:
- Total Number of Borrowers: 44.7 million
- Total Remaining Student Loan Debt: 1.569 trillion
- Amount Borrowed Each Year: $105.5 billion
- Percentage of College Grads with Debt: 71%
- Average Debt per Graduate at Graduation (2017): $28,500
- Delinquent Loans: 11.4% of aggregate student loan debt as of Q4 2018
- Defaulted Students Loans With Private Collections Agencies: $113.3 billion Q4-2018
Individual Student Debt Continues to Increase
The rise in student loan debt is nothing new. Due to inflation and higher tuition prices, student loan debt has increased steadily since 1993. The class of 2017 graduated with 2.5% more debt than those who finished in 2012 and 14% more than those who graduated ten years earlier.
Average Debt per Borrower In Each Graduating Class (in 2017 Dollars)
Decline in Nation-Wide Student Loan Disbursement
Students owe a lot of debt, but current students now collectively borrow less than they used to. Since the 2010 to 2011 academic year, the amount of money borrowed has significantly declined. From 2010 to 2011, non-federal and federal sources loaned students and parents $127.7 billion—the most ever awarded in a single year. That’s over a 200% increase compared to 10 years prior. However, for the 2017-2018 school year, borrowers only took out $105.5 billion. This number is actually less than the amount awarded back in 2007-2008. If trends continue, things are looking up.
Why is the amount declining? Tuition prices have steadily increased over the years, so it is safe to say college is not cheaper. However, one explanation for this student debt statistic is decreasing student enrollment. In 2011, more students than ever attended college: 16.625 million. Heading into 2012, enrollment numbers dropped to 16.17 million and then down to 14.58 million in 2017. Fewer students mean fewer people that need loans.
Individual Students Now Borrow Less
The class of 2016 left college owing more money than any other class. However, students currently in college are beginning to borrow less and less. The average annual loan amounts in 2016 are actually lower than they were five years ago. Undergraduate students even borrow less than students did ten years. This suggests students and parents are looking for alternative ways to afford their education aside from loans including working through college to help pay for tuition.
The Micro-Level Burden of Student Loans
If less money is borrowed each year, are student loan still of growing concern in 2019? Absolutely! Beginning in 2011, students did collectively borrow less money as college enrollment declined. However, the average debt load individual students carry has continued increasing. This suggests that while the macro-level problem of student loan debt may start declining, student loan debt on a micro-level is still a hardship in 2019. The 11.4% student loan delinquency rate and growing number of income-driven repayment plan enrollees provide proof.
What Percentage of Students Borrow Money?
It may seem like it, but not every student has to borrow money for college. For the 2016 to 2017 school year, 29% of bachelor’s degree recipients, 51% of associate degree recipients, and 38% of master’s degree recipients graduated debt free. Of four-year public and non-profit private college graduates, 69% and 72% graduated with debt respectively. If you attend a for-profit private institution, expect to borrow. Roughly 87% of these students have student loans. For those who do borrow money, the loan type greatly varies.
Where Do the Loans Come From?
The majority of student loans come from the federal government with the need for private loans declining. For the 2017 to 2018 school year, private loans made up just 11% of the total borrowed money. This is down significantly from years prior. Looking back just 10 years, private loans covered 25% of all loans taken out that year. Federal unsubsidized loans, which do not start accruing interest until you leave school, make up the highest share.
The current share of student loans borrowed is as follows:
- Federal Subsidized Loans: 20%
- Federal Unsubsidized Loans: 46%
- Parent PLUS Loans: 12%
- Grad PLUS Loans: 10%
- Perkins Loans: 1%
- Nonfederal Loans: 11%
Who Owes this Money?
Master’s Students Shoulder the Majority of Debt
Choosing to earn a Master’s degree certainly comes at a cost. Unlike doctorate students, most Master’s degree students do not have opportunities for assistantships or grants. Instead, they cover 53% of tuition costs with loans , taking out an average of $13,151 for each year of graduate school. This debt makes up 38% of the nation’s student debt load even though Master’s degree students only make up 17% of all federal student loan borrowers.
Debt Burden of Students at Private Colleges
Students attending a private college pay nearly three times as much as those attending an in-state public university. It follows then that bachelor’s, master’s, and doctorate program graduates from private universities owe much more than their public college counterparts. In 2012, bachelor’s degree graduates from private universities owed an average of $32,300 while public school graduates only owed $25,550.
Newer data confirms that students at private colleges continue to borrow more federal money each year than their public school counterparts. This is especially true for students enrolled at four-year private for-profit colleges. The National Center for Education Statistics reports that the average amount of federal student loans borrowed in 2015-2016 was $6,700 at public four-year colleges, $7,200 at private non-profit four-year colleges, and $8,200 at private for-profit four-year colleges.
The trend continues when you consider private student loans as well. For the 2015 to 2016 school year, the average amount of private loans borrowed was $7,800 at public four-year colleges, $8,100 fat for-profit colleges, and $12,400 at private non-profit four-year colleges. Unlike federal loans, these private loans do not come with many of the protections offered by the federal government.
Senior Citizens Still Owe Money
Data from the New York Federal Reserve tells us that borrowers ages 39 and under have the highest total student loan balance. This makes sense since you (theoretically) pay off more debt as time goes on. However, student debt is not just a young adult issue. As of 2017, nearly 3.2 million people age 60+ are still paying off debt—three times more than were a decade ago. For this age group, the total loan balance is 85.4 billion dollars. Although it is the least amount owed by any age group, it is evidence of the lengthy burden student loans present.
Student Debt Statistics by State
The state you live in could actually affect your future student debt load. In Connecticut, the average student loan debt for 2017 graduates is $38,510. This is the highest average right in front of Pennsylvania at $36,854. If you are looking for a bargain, head to Utah. Students there only average $18,838 in student loan debt. This number is down from $19,975 in 2016. The way states fund their public colleges and award grant money plays a role in these numbers. Check out The Institute for College Access and Success interactive map to see your state’s average.
Parents Contribute, but Students Owe More
Parents often cosign private loans for the 6% of students who take them out. They’re ultimately still responsible for the debt, but the student typically takes responsibility for paying it back. Parents also borrow an average of $17,500 in Parent PLUS loans to help cover their child’s expenses. Even with all of the parental borrowing, students still borrow more on average, but the numbers are getting closer. Sallie Mae found that in 2018, around 14% of college costs were covered by student borrowing while parent loans covered 10%. Compare that to their 2017 research that found student loans covered 19% of college costs while parent loans covered just 8%. This shows a trend towards parents assuming more and more financial responsibility for their child’s education.
Is College Even Worth it Anymore?
Looking at student debt statistics might scare you away from college. Do not ignore these statistics, but do not let them make your decision for you. A lot of factors go into determining whether college is worth it. If finances are of no concern, then the answer is most certainly “yes.” If they are of concern, the answer requires a lot of smart decision-making and toying with numbers. Luckily, there are many scholarships available to help offset college costs.
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