June 11, 2017

23 Overwhelming Student Loan Debt Statistics

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The average graduate has $37,172 in student loan debt, making it America's fastest growing consumer debt. Read on for more alarming statistics.

Worried about student debt? So are we. The student loan debt crisis is real. Total student loan debt quickly surpassed auto loan and credit card debt. Only mortgage debt is higher.

Uncover the most shocking statistics about student loan debt. Here are jaw-dropping statistics to help you get real about one of America's largest debts.

3 Facts Every College Grad Needs to Know

1. How much debt does average college graduate have?
The average student loan debt is staggering. The average college graduate leaves college with around $37,172 in student loans. Ten years ago, the average student left college with just $20,000 in student loans.

2. How many college students have student loans?
Seven out of 10 college students leave college with student loans. This number has stayed consistent over the last 10 years. It's alarming that it has increased faster than any other consumer debt.

3. What is the average student loan monthly payment?
The average student loan monthly payment remains at $351. In 2005, the average payment was $227 after adjusting for inflation. This takes into account payments both higher and lower than $351. Only a small number of graduates have monthly payments exceeding $351.

Student Loan Debt Crisis in America

4. What is student debt?
Money you borrow to pay for higher education is student debt. Many students think a higher education means a higher-paying career. There are many types of student loans, including those for public and private schools.

5. What was the average student loan debt in 2015?
In 2015, graduates left college with an average of $30,100 in student debt. This is 4% higher than 2014.

6. What was the average student loan debt in 2014?
In 2014, students graduated college with an average of $28,950 in student loans.

7. How much has student loan debt increased?
Since 2004, the number of students with loans increased from 65% to 69%. What has changed drastically, however, is the average amount of debt. The amount has increased almost twice the rate of inflation.

Rising Tide

8. How much student debt is out there?
According to the Federal Reserve, Americans have a total of $1.3 trillion in student debt.

9. What is the average interest rate on a student loan?
Today, federal loans, either subsidized or unsubsidized, offer a 4.45% interest rate.

There are several types of student loans, though. The average depends on the loan in question. Federal student loans have fixed interest rates set by the government. The rate you get doesn't depend on your qualifying factors. Private loans, though, have variable rates based on your credit, income, and debt ratio.

10. What is the average student loan debt for a master's degree?
Almost 40% of the federally funded student loans fund graduate programs. This money funds degrees in a variety of fields, not just medical degrees.

11. How many years does it take to pay off a student loan?
The standard repayment period for federal student loans is 10 years. This is the default plan for every borrower. If you can't afford the payment, discuss it with your loan servicer. There are several repayment plans available.

12. How long is the grace period on student loans?
The repayment period doesn't begin until you graduate or leave college. As long as you stay enrolled at least half-time, repayment isn't required. Once you leave college, though, you have a 6-month grace period. This doesn't include PLUS or Perkins loans, though.

13. How many college students have subsidized loans?
The Department of Education pays accrued interest on subsidized student loans. This year 6.9 million borrowers held these loans. They borrowed $22.6 billion.

14. How many college graduates signed up for PSLF?
The PSLF program forgives federal student loans for those working in public service. Only federal loans are eligible. The program requires at least 10 years in public service. This year marks the first year any borrower will be eligible. At this point, 400,000 borrowers signed up. This doesn't include those who will retroactively apply for the program.

15. What fees does the government charge for federal student loans?
Subsidized and unsubsidized student loans incur loan fees. The loan servicer deducts the amount directly from your disbursements. The servicer deducts amounts proportionate to the disbursement. Federal loans disbursed before October 1, 2016 and after October 1, 2015 pay 1.068% of the loan amount. Those disbursed before October 1, 2017 and after October 1, 2016 pay 1.069% of the loan amount.

16. How much higher are interest rates for the 2017-2018 school year?
Starting July 1, undergraduate federal loan interest rates rise 15.4% and graduate loan interest rates rise 11.5%. This represents a 4.45% rate for undergraduate loans and a 6% rate for graduate loans.

17. How much more will the standard repayment plan cost borrowers?
A borrower with the average $34,000 in debt will pay $1,300 more in interest.

18. What is the unemployment rate for bachelor's degree recipients?
As of January 2017, adults aged 25 and older with at least a bachelor's degree had a 2.5% unemployment rate. This rate remained steady from 2016. The overall unemployment rate for everyone was 48% higher at 4.8%.

19. How many borrowers default on student loans daily?
As shocking as this sounds, every day 3,000 borrowers default on their student loans. This means 1.1 million more people default each year. It's no wonder there are 4.2 million graduates in default on their student loans.

20. What's the maximum amount of federal loans for an undergraduate?
Dependent students can receive the following loan amounts from the government:

  • 1st year of college: $5,500 ($3,500 max in subsidized loans)
  • 2nd year of college: $6,500 ($4,500 max in subsidized loans)
  • 3rd and 4th year of college: $7,500 ($5,500 max in subsidized loans)

Definition: Independent students are one of the following:
  • 24 years or older
  • Married
  • Veteran
  • Active military
  • Graduate student
  • Has legal dependents

21. Can the government garnish wages for unpaid federal student loans?
Not paying your student loans results in collection activities. Among those activities, wage garnishment may occur. First, the government accelerates the loan. This means you owe the entire remaining balance. They may send it to a collection agency first. If this does not resolve the issue, they can garnish your wages. They don't need a court ordered judgment. They can garnish up to 15% of your disposable income.

22. How many college graduates move back home?
Almost half of 18-24-year-olds live at home with their parents. But only 19% of them have at least a bachelor's degree.

23. What percentage of parents is concerned about paying for college?
A 2017 survey by Discover Student Loans shows the concern parents have about college costs. 74% of parents in the survey are very or somewhat worried about paying for college (40% are very worried, 34% are somewhat worried).

Surprisingly, though, only 45% of those surveyed completed the FAFSA. This is the Free Application For Student Aid. Without this application, families are ineligible for federal student aid or even grants.

Bottom Line

Student loans can help finance a college education. But make sure you understand the depth of your loans. Ask your loan servicer about the terms. Make sure you exhaust all federal options and inquire about grants. Once you graduate, consider an income-driven repayment plan. You may then be eligible for loan forgiveness too.

The more you know, the more affordable your college education can be.

Sources and References:

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