It's perhaps no surprise, then, that 24% of Americans with student loan debt say it's their biggest financial regret, according to a survey from personal finance site Bankrate.
Nearly a quarter of Americans with student loan debt (24 percent) say borrowing too much for their education is their biggest financial regret, according to a Bankrate survey conducted in June.
The student loan default rate has declined since 2020. In 2022, the three-year student loan default rate was 2.3%. From 2016-2020, student loan default rates were around 10-11.5%. People who attend for-profit colleges default at higher rates than those who attend public or nonprofit institutions.
ELVTR's higher education study found that most (54%) have experienced mental health issues brought on by their student debt. At 56%, anxiety is the leading mental health issue caused by student loan debts, while approximately one in five have endured sleepless nights and panic attacks as a result.
12.1 million or 28% of adults in their 30s have student loan debt. 7.6 million or 17% of adults in their 40s have student loan debt. 5.2 million or 12% of adults in their 50s have student loan debt.
Black and African American student borrowers are the most likely to struggle financially due to student loan debt making monthly payments of $250. Asian college graduates are the fastest to repay their loan debt and the most likely to earn a salary that exceeds their student loan debt balance.
Average Student Loan Debt by Age
Those aged between 50 to 61 have the highest average student loan debt at $45,600. 6.05% of federal student loan debt belongs to adults under the age of 25. Adults aged 25 to 34 years old hold 30.2% of the federal student loan debt; 38.9% belongs to 35- to 49-year-olds.
Data Summary. The average federal student loan payment is about $302 for bachelor's and $208 for associate degree-completers. The average monthly repayment for master's degree-holders is about $688.
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more.
Confusion between on-ramp period, payment pause
In the past, default rates among student loan borrowers have skyrocketed when payments resumed after natural disaster-related forbearances. “I also attribute some of it to some borrowers just not realizing payments have come due,” Mayotte said.
Interest can make student loans more expensive, while inflation can make that debt harder to manage alongside other bills. Paying off some of your debt during your studies could ease the burden later on and save you money on interest.
Key Takeaways. Carrying student debt can affect your ability to buy a home if your debt-to-income ratio is too high. If you have too much student loan debt, you won't be able to save as much for retirement. Student loan debt can lower your credit score, especially if you fail to make on-time payments.
If you have $80,000 in student loan debt, you may find it to be a significant burden — though it isn't difficult to understand how you were saddled with such a high debt amount.
Opponents of student loan cancellation say that one-time student loan forgiveness is a band-aid on a much larger, unaddressed problem: the growing cost of a college education. College tuition is only getting more expensive.
The average student loan debt amount is slightly over $30,000. However, many borrowers owe $50,000 or more in student loan debt. This isn't impossible to overcome using the right repayment methods.
If those monthly payments look low compared to what most borrowers pay, it's because most borrowers carry a lot more than $20,000 in student loan debt. As of March 2023, the average federal student loan debt in the United States was about $37,720, according to a BestColleges analysis of Education Department data.
People aged 40-49 hold the highest amount of debt with $4.21 trillion in total. By 2030, Millennials (born between 1981 to 1996) are expected to have the most total debt at an average of $228,891 per person.
29.6% of Americans in the 100 largest metros were behind on their debt payments between July 1 and Sept. 30, 2023. These debts include credit cards, auto loans, personal loans, mortgages, student loans and others. Southern residents are particularly likely to be behind on a payment.
Women owe a disproportionately high amount of the total student loan debt. Women are also more likely to have high amounts of debt. Some of this is likely due to the fact that female bachelor's degree holders are paid 74% of what their male peers make.
Unfixed interest rates
While some loans may start out at a reasonable interest rate, predatory lenders don't abide by the same rules as federal loans, which never increase. Some lenders may double or triple the interest rate over the lifespan of the loan, making it nearly impossible to pay off.
“It's operating as a poverty tax, because people are paying far more in interest.” Currently, 44 million people are burdened with $1.7 trillion in student loan debt in the US, a figure rife with racial and class disparities that have doubled in the past decade.