Millions of Americans rely on the federal government to cover the cost of college. Education loans have existed for generations, but borrowing only really took off in the past two decades.
Public awareness of education debt is high amid debates over loan forgiveness. President Biden said Wednesday he would cancel up to $10,000 in federal student loan debt for many borrowers, and up to $20,000 for Pell Grant recipients. Critics of broad cancellation say the policy would disproportionately benefit elites, while proponents say the student loan burden is far more nuanced.
Here’s how the debt shakes out.
How does the debt break down?
Most student debt is held in large loans, but most borrowers have small loans.
About 13% of federal student debt is held in loans of $20K or less...
32%
38%
5
8%
17%
<$10K
10-20K
20-40K
40-100K
100K+
...but 53% of borrowers owe less than $20K
7%
100K+
18%
40-100K
33% of borrowers have $10K or less left on their loans
20%
10-20K
21%
20-40K
Most student debt is held in large loans, but most borrowers have small loans.
About 13% of federal student debt is held in loans of $20K or less...
32%
38%
5
8%
17%
<$10K
10-20K
20-40K
40-100K
100K+
...but 53% of borrowers owe less than $20K
33% of borrowers have $10K or less left on their loans
20%
10-20K
21%
20-40K
7%
100K+
18%
40-100K
Most student debt is held in large loans, but most borrowers have small loans.
About 13% of federal student debt is held in loans with $20K or less still owed...
32%
38%
5%
8%
17%
<$10K
10-20K
20-40K
40-100K
100K+
...but 53% of borrowers owe less than $20K
33%
<$10K
20%
10-20K
21%
20-40K
18%
40-100K
7%
100K+
About 1 in 5 Americans hold student loans. More than half of those 45 million people with federal student loans have $20,000 or less to pay, with about a third of all borrowers owing less than $10,000. Seven percent of people with federal debt owe more than $100,000.
Economists at the Federal Reserve say borrowers with the least amount of debt often have difficulty repaying their loans, at times because they did not complete a degree. Conversely, people with the highest loan balances are often current on their payments likely because of their higher education levels and associated earning power, according to the Federal Reserve.
Those higher balances account for nearly 40 percent of the $1.6 trillion in outstanding federal student loans. Borrowing for graduate degree programs has been a primary driver of the growth in federal lending. Whereas borrowing for undergraduate degrees declined by $15 billion from the 2010-11 academic year to 2017-18, it increased for graduate programs by $2.3 billion during that period, according to the National Center for Education Statistics.
Who holds student debt?
Percent of Americans in each age group that owe:
< $10K
10-20K
20-40K
40-100K
100K+
No debt
Ages 18-24: 24% have student debt
25-34: 33%
35-49: 23%
50-61: 12%
62+: 4%
Percent of Americans in each age group that owe:
10-20K
100K+
No debt
< $10K
20-40K
40-100K
Ages 18-24: 24% have student debt
25-34: 33%
35-49: 23%
50-61: 12%
62+: 4%
Percent of Americans in each age group that owe:
$10K or less
$10-20K
$20-40K
$40-100K
$100K or more
No debt
24% have student debt
76% do not have student debt
Aged
18-24
33%
67%
25-34
23%
77%
35-49
88%
12%
50-61
96%
4%
62+
Student debt is most prevalent among Americans aged 25 to 34. Sixty-seven percent of student loan borrowers are under 40, according to the New York Federal Reserve, but only 57 percent of balances are owed by those under 40. In other words, people with larger balances are more likely to be older likely due to borrowing for graduate school.
Among the fastest-growing categories of student loan borrowers over the past two decades are Black students and people ages 50 and older, according to the most recent Federal Reserve data. The median income of households with student loans is $76,400, and 7 percent of borrowers are below the poverty line.
Where did the money go?
Although a majority of college students attend public two- and four-year institutions, about half of outstanding student debt is held by people who went to private schools. Among those private schools, for-profit colleges account for 17 percent of the debt while private nonprofit universities account for another 34 percent.
People who attended for-profit colleges were more likely to struggle to repay their loans than others, according to the Federal Reserve. Fed economists say high costs and low returns to for-profit enrollment generate worse student debt and repayment outcomes. They found more than one-fourth of borrowers who attended for-profit schools were behind on payments, compared with 10 percent who went to public institutions and 5 percent who attended private not-for-profit institutions.
Where do borrowers live?
Average federal student debt per borrower, in thousands of dollars
Below $33K
33-36K
36-39K
Above 39K
ME
33
AK
VT
NH
WI
34
32
38
34
WA
ID
MT
ND
MN
IL
MI
NY
MA
36
33
33
29
34
38
36
38
34
OR
NV
WY
SD
IA
IN
OH
PA
NJ
CT
RI
37
34
31
31
30
33
35
35
35
35
32
CA
UT
CO
NE
MO
KY
WV
VA
MD
DE
37
33
37
32
35
33
32
39
43
38
AZ
NM
KS
AR
TN
NC
SC
DC
35
34
33
33
36
38
38
55
HI
OK
LA
MS
AL
GA
37
32
35
37
37
42
PR
TX
FL
33
38
28
Average federal student debt per borrower, in
thousands of dollars
Below $33K
$33-36K
$36-39K
Above $39K
ME
33
AK
WI
VT
NH
34
32
38
34
WA
ID
MT
ND
MN
IL
MI
NY
MA
36
33
33
29
34
38
36
38
34
OR
NV
WY
SD
IA
IN
OH
PA
NJ
CT
RI
37
34
31
31
30
33
35
35
35
35
32
CA
UT
CO
NE
MO
KY
WV
VA
MD
DE
37
33
37
32
35
33
32
39
43
38
AZ
NM
KS
AR
NC
SC
DC
TN
35
34
33
33
36
38
38
55
HI
OK
LA
MS
AL
GA
37
32
35
37
37
42
TX
FL
PR
33
38
28
Average federal student debt per borrower in thousands of dollars
Below $33K
$33-36K
$36-39K
Above $39K
ME
33
AK
WI
VT
NH
34
32
38
34
WA
ID
MT
ND
MN
IL
MI
NY
MA
38
34
33
29
34
38
36
36
33
OR
NV
WY
SD
IA
IN
OH
PA
NJ
CT
RI
37
34
31
31
30
33
35
35
35
35
32
CA
UT
CO
NE
MO
KY
WV
VA
MD
DE
37
33
37
32
35
33
32
39
43
38
AZ
NM
KS
AR
TN
NC
SC
DC
33
33
36
38
38
55
35
34
OK
LA
MS
AL
GA
HI
37
32
35
37
37
42
PR
FL
TX
28
38
33
Americans across the country are counted in the ranks of student loan borrowers, but there are some areas that have a concentration of people with high balances. Washington, D.C., takes the top seat, with the average federal student debt per borrower at $55,000, followed by Maryland at $43,000 and Georgia at $42,000.
Some states with high debt balances have a high proportion of residents with graduate degrees. Metropolitan Washington, for instance, is one of the most educated regions of the country. The District has the highest percentage of residents with advanced degrees, while Maryland has the third-highest, according to Census Bureau data.
Average debt loads can also be a consequence of state investment in higher education. States that prioritize funding public colleges and universities, such as California and New York, have relatively lower average debt per borrower, despite having among the largest numbers of people with student loans.
Nick Mourtoupalas contributed to this report.
Graphics use data from the Federal Student Loan Portfolio, published by the Department of Education.