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What is the Average Student Debt?

As the costs of college continue to rise faster than inflation and family incomes struggle to keep pace, student debt has emerged as a crisis saddling over 45 million Americans. Undergraduate borrowing has skyrocketed, with federal data now showing the average student debt balance upon earning a bachelor’s degree has swelled to $28,400. Delving deeper into the $1.7 trillion national student debt total reveals a complex web of figures – from those still actively enrolled to graduates 10 years into repayment – where experiences diverge based on degree type, college choice, academic major and other facets.

Yet regardless of the exact borrowing trajectory, nearly all analysts agree student debt is creating an economic drag rarely seen in modern history. Unlike other debt assumed to grow income like mortgages or business loans, student borrowing hampers millions during early earning years and prime wealth building phases of life. The ripple effects span delayed home buying, lower retirement savings, and fewer investments for generations just embarking on careers.

This article provides an up-to-date, multilayered analysis around answering the critical question “What is the average student debt?”. Determining one catch-all figure proves challenging given the diversity of American collegiate experiences. By exploring national averages, debt statistics based on degree type, college selected, academic major, geography, and other segments – readers will come away with a textured perspective on how typical student borrowing has both fundamentally shifted and expanded economic hurdles for younger generations today.

Calculating Average Student Loan Debt

  • Main metrics needed are total outstanding student loan debt and total number of borrowers
  • Primary data sources
    • Federal Reserve Bank of New York releases household debt statistics quarterly
    • Student Loan Hero does periodic reporting as well
  • Formula:
    • Current U.S. student loan debt balance ($1.762 trillion – NY Fed, Q3 2022)
    • Divided by total number of borrowers (47.2 million, per Student Loan Hero’s 2022 report)
  • Additional considerations
    • Median debt also useful statistic to surface
    • Not all borrowers actively repaying, complicates average figures

Current Statistics on Average Debt

  • Bachelor’s degree graduates average $28,400 upon graduation across all colleges (U.S. Department of Education, 2023)
    • Those from public state schools average $27,000 (CollegeBoard, 2023)
    • Private nonprofit colleges higher at $32,300
  • Over last 30 years, debt at time of graduation has risen exponentially (Forbes, 2022)
    • Late 1980s – less than $10,000
    • Late 1990s – approx. $16,000
    • 2013 graduates – over $28,000
  • At two-year colleges, averages currently sit around $14,000 (U.S. News, 2022)

Introduction to What is Average Student Debt?

Over 44 million Americans currently have student loan debt, with the total outstanding student loan balance topping $1.75 trillion nationally (Federal Reserve, 2023). This represents an exponential rise over the last few decades – both in terms of total student debt balances and the number of borrowers impacted.

This ballooning student debt crisis has significant economic implications, making it harder for graduates to afford major life milestones like buying a house, getting married, having children, investing for retirement, and more (NPR, 2022). With nearly one in four American adults paying off student loans, this debt burden on younger generations also slows broader economic growth by limiting discretionary spending and savings rates.

The purpose of this article is to provide a comprehensive, up-to-date analysis of student loan debt statistics in America today – with a particular focus on illuminating the current average student debt balance. Determining accurate average figures can be complex, as borrowing scenarios vary widely among the nearly 45 million Americans with student debt. However, recent federally-compiled household debt data in combination with private analysis of borrowing trends will allow a detailed examination of average student debt levels.

By looking at average debt from graduation, during enrollment, across degree types, college types, states, majors and more, readers will come away with a multilayered understanding of typical student debt burdens facing borrowers today. The article will also analyze the complex factors driving increased borrowing over time, short a

Calculating Average Student Loan Debt

Determining the average student debt balance requires identifying two key metrics – the total outstanding student loan debt balance and the total number of borrowers with loans. By dividing the aggregate national student debt figure by the number of borrowers, an average balance can be calculated.

However, compiling these input statistics can be complex given the diversity of lending programs and repayment scenarios amongst borrowers. For total national student loan debt, the Federal Reserve Bank of New York releases the most reliable figures quarterly as part of their household debt report. This amounted to $1.762 trillion nationally as of Q3 2022 (Federal Reserve, 2023). The underlying data sums all categories of education debt including federal and private student loans, along with Federal Family Education Loan (FFEL) balances.

Calculating the total number of borrowers proves more difficult, with estimates ranging from 45-50 million Americans currently paying back student loans (Forbes, 2023). Private research groups like Student Loan Hero periodically try to model the actual figure based on segmenting federal data releases by loan type. Their most recent report put the total borrower count at 47.2 million as of 2022 (Student Loan Hero, 2022).

So applying these inputs, the latest average student loan debt figure would be:

Total US Student Loan Debt = $1.762 trillion Total Number of Borrowers = 47.2 million $1.762 trillion / 47.2 million = $37,312

This average debt estimate at a national level masks significant variation underneath though among borrowers. For a more granular perspective, dividing federal loan data among undergraduate vs. graduate borrowing would surface a current average of $28,400 for bachelor’s degree holders and $71,000 for those with advanced degrees (U.S. Department of Education, 2023).

Alternate statistical measures like median student debt also help characterize the full experience of borrowers still paying back loans. Since outstanding debt spans decades for some, median calculations better capture current realities for those recently finishing college. Whether looking at median or averages figures, assessing student loan debt requires segmenting groups by age, degree type, enrollment status and other facets as no one statistic tells the whole story.

Current Statistics on Average Debt

Examining average student debt figures across various segments of borrowers reveals diverging experiences underneath broad national averages.

For Bachelor’s Degree Graduates

Among recipients of four-year degrees, average student debt balances upon graduation include:

These statistics demonstrate the significant debt burden now facing around two-thirds of college students who take out loans to fund increasingly expensive tuition and costs of attendance.

During College

Timeseries analyses reveal how average per-borrower debt has grown substantially over recent decades:

  • 1990s – Average debt near graduation: $16,000 (Forbes, 2022)
  • Early 2000s – Mid $20,000s average debt
  • 2010s – Average debt reaches $30,000 threshold

Comparing two-year community or technical college borrowing to four-year programs also shows divergence, with current average debt of $14,000 for shorter certificates/degrees vs. nearly $30,000 for bachelor’s recipients (U.S. News, 2022).

By State

Geographic data mappings reveal state-by-state variation in average debt levels for recent college graduates or students still actively enrolled:

  • Highest average debt: Connecticut ($38,510) (EducationData, 2023)
  • Lowest average debt: Utah ($18,838)

By College Major

Grouping borrowing data by field of study uncovers diverging average debt outcomes depending on academic major:

  • Highest debt levels: Pharmacy ($119,754), Optometry ($162,660), Physical Therapy ($124,080), Law ($145,500) (Forbes, 2022)
  • Lowest debt levels: Early Childhood Education ($18,650), Social Work ($23,170), Library Science ($23,300)

These figures reflect loan amounts needed to pay for historically more expensive academic degree programs, driving above-average borrowing particularly in select healthcare and professional fields. Comparing averages over the past decade shows how debt has accelerated across nearly all majors as well.

Underlying Causes

Several key factors have collectively driven the exponential growth in student borrowing and loan balances over the past 25+ years:

Rapidly Rising College Costs

  • Flagship state schools have seen costs escalate by over 200% since 1990, significantly outpacing even growth in broader inflation (U.S. News, 2021)
  • Private 4-year universities now average over $55,000 per year for tuition/fees/room/board – more than double costs in 1990 (U.S. News, 2021)
  • Budget cuts to higher education funding shifted more costs to students/families rather than states over time

Stagnant Wages

  • Growth in median household income/wages has severely lagged tuition hikes (8% vs nearly 300% since 1990) (Lendumo, 2022)
  • Families across middle class unable to keep pace or pay out of pocket like previous era

Generational Shift

  • More lower/middle class families turning to loans, making them essential to access college (New York Times, 2022)
  • First generation students lacked financial resources/planning compared to wealthier peers

Risk Shift

  • Public investment in higher education dropped sharply since 1990s while enrollment rose (CNBC, 2021)
  • Shift of funding obligation from states/endowments to families through student debt

Lending Industry Marketing

  • Massive boom in private lenders offering wide access to credit without consideration of risk or outcomes

Collectively these economic, political and social dynamics dramatically increased reliance on borrowing to attain postsecondary degrees – requiring deeper analysis of the ensuing effects and downstream implications today.

Effects and Consequences

The unprecedented growth in student borrowing and increasing debt loads are now exerting significant financial, mental health, career, and inequality impacts across society.

Financial Hardships

  • Home ownership rates for millennials/Gen Z far behind previous generations due to student debt tradeoffs (CNBC, 2021)
  • Difficulty saving for retirement or building net worth compared to debt-free peers
  • Delays major life events like marriage, children, pursing dreams due to repayment obligations

Mental Health

  • Borrowers with student debt experience higher anxiety, depression symptoms VS national averages (Harvard Study, 2021)
  • Persistent worry and stress around affording payments and navigating complex regulations

Career Limitations

  • Over 50% say loans influenced employment choice, prioritizing salary over passion/mission (Ohio Fed Study, 2022)
  • Fear of debt prevents graduate program enrollment, capping earning potential

Inequality Worsens

  • Black students take on more average debt with higher interest rates (Unidos, 2022)
  • Trillions now owed largely by those still building careers and families

Documenting how broad swaths of younger generations now carry a significant financial weight not experienced by college graduates historically puts an even finer point on the urgency for solutions.

Outlook and Solutions

With greater awareness of the economic hindrance affecting million Americans due to mounting student debt, an array of policy proposals, simulations, and individual tactics aim to ease the crisis.

Policy Proposals

Several initiatives seek to reform underwriting practices and terms to lessen future borrowing, while also providing relief for existing debts:

  • Improved income-based repayment models that link payments to wages rather than fixed schedules regardless of earnings (Brookings, 2022)
  • Broad or targeted loan cancellation to immediately reduce balances, freeing up income for spending (Levy Institute, 2022)
  • Debt-free college or tuition-free models through greater state/federal funding support (Department of Education, 2022)
  • Capping interest rates on existing debt and future loans to prevent ballooning balances (Huffington Post, 2023)
  • Expanding Pell grants and scholarships to lessen need for borrowing in the first place (New America, 2021)

Research modeling cancellation programs and reforms also attempt to quantify economic impacts like job and GDP upside created. (Levy Institute, 2023)

Student Tips

Alongside policy remedies, experts continue offering advice to student and families wary of excessive debts:

  • Explore 529 savings plans starting early in childhood to accumulate college funding (Savingforcollege.org, 2023)
  • Aggressively seek out scholarship offerings tailored to strengths and experiences (Niche, 2023)
  • Evaluate public college or community college options for 2 years to lower total costs
  • Create budgets tracking income and expenses during school to minimize non-essentials
  • Consider working during academic terms or summers to pay ongoing costs
  • Avoid unnecessary purchases like spring break trips or electronics using loan monies

With college affordability worsening over decades, addressing the effects of current debts while preventing further burdens will remain an economic policy priority during coming election cycles on local, state and national levels.

Key Takeaways

Given the concerning rise of student debt balances over the past 25+ years and the now $1.7+ trillion outstanding borrowing total, it’s essential to synthesize current statistics and trends for policymakers, families, and borrowers.

Average Student Debt Levels

  • At the national aggregate level, average student debt now sits around $37,000 per borrower when dividing total balances by the number of consumers with loans
  • However, recent bachelor’s degree recipients report average debt of $28,400 upon graduation in federal data analysis
  • During active enrollment, average debt nationally approaches $30,000 at 4-year institutions versus $14,000 for 2-year colleges

Reasons Behind Growth

Four primary drivers explain the consistent, rapid increases in borrowing over generations:

  1. College tuition and costs rising over 200% since 1990, far outpacing median wage growth
  2. Public funding for higher education dropping sharply, shifting financial burden to families
  3. A generational shift where loans became essential for lower/middle class to attend college
  4. Aggressive lending industry marketing more loans without consideration of risks

Adverse Effects

From this ballooning debt crisis, side effects now span financial, mental health, career, and inequality spheres:

  • Financial milestones like buying a house delayed significantly
  • Anxiety/depression rates worse among those carrying loans
  • Over 50% feel constrained from embarking on passionate career paths
  • Inequality worsens both economically and across racial divides

Cautious Optimism on Solutions

Proposed reforms finally aim to ease this decades-long crisis including forgiveness programs, income-based repayments, grants expansion, free college or debt-free college – alongside continued financial planning.

With a multilayered grasp of current figures, reasons, consequences and outlook, key stakeholders can make further progress addressing today’s $1.7 trillion student debt predicament.

What age has the most student debt?

Americans aged 25 to 34 face the highest student debt burdens, averaging nearly $40,000 per borrower. This age group represents peak earning years shortly after graduation when repayment begins.

What is the average student debt in the UK?

In the United Kingdom, graduates had an average debt of £45,000 ($50,000 in US dollars) in student loans upon finishing school in 2020. England has the highest university fees among the countries comprising Great Britain.

What is the average student debt after 4 years?

After a standard 4-year bachelor’s degree program, the average graduating student debt balance is $28,400 for those taking out loans at public and private non-profit colleges and universities in the U.S.

Are student loans forgiven after 20 years?

Some federal repayment plans do discharge remaining student loan balances after 20 years of payments, and some after 25 years. These apply only to federal direct loans.

Does Gen Z have student debt?

Yes, Gen Z (born 1997 to 2012) either currently has or is taking on historic amounts of student debt as they pursue post-secondary education. Over half of Gen Zers still enrolled expect to graduate with student loans.

How many Gen Z have student loans?

As of 2022, approximately 56% of Gen Z students graduating with bachelor’s degrees take out student loans. About 7.8 million Gen Z Americans have federal or private student loan debt.

Do student loans go away?

No, student loans do not go away on their own. They must be repaid over time or discharged/forgiven under certain federal repayment programs after an extended period of payments. Defaulted loans sent to collections also remain on credit records.

Should I pay off my student loans?

Paying off student loans entirely makes financial sense if you have the means. This can accelerate wealth building in areas like retirement, investing, or real estate rather than accruing interest on education debt. Weigh payoff options against other near-term money priorities.

How to pay off student loans?

Tips for paying off student loans faster include paying above minimum amounts each month, making biweekly instead of monthly payments, opening separate high-yield savings just for debt paydown, limiting expenses to allocate more to loans, refinancing to better rates, and researching alternate strategies like debt avalanche or debt snowball methods.

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