Over the past four years, the Administration has approved nearly $180 billion in student debt relief for 4.9 million borrowers through various actions, taking historic steps to aid hardworking Americans across the country who have worked to repay their student loans but remained in debt.
Most student loans — about 92.4% — are owned by the government.
Federal, state, and local governments provide $878.2 billion or $17,700 per pupil to fund K-12 public education. The difference between spending and funding is $21.0 billion or $420 per pupil. The federal government provides 13.6% of funding for public K-12 education.
Students and parents borrowed an estimated $98.2 billion in the 2022-23 academic year. 44% of this was federal unsubsidized loans, 16% was federal subsidized loans, 15% was private or other nonfederal loans, 14% was Grad PLUS loans and 11% was Parent PLUS loans.
The federal Direct Loan program helps students and their parents pay for higher education. The Department of Education's estimates of the program's cost have increased substantially over the last 25 years: shifting from generating $114 billion in income for the government to costing $197 billion.
The federal government began guaranteeing student loans provided by banks and non-profit lenders in 1965, creating the program that is now called the Federal Family Education Loan (FFEL) program.
So you give a dollar (well, probably more than one) to the federal government in taxes. How does it get spent? It might surprise you to know that only about 2 cents of that dollar goes to education.
Among the 41 states with reported data, New York schools led the nation in per-pupil spending in 2021 and 2022, spending $26,571 in 2021 and $27,504 in 2022.
Nearly half of mandatory spending in 2022 was for Social Security and other income support programs such as the Child Tax Credit, food and nutrition assistance, and federal employee benefits (figure 3). Most of the remainder paid for the two major government health programs, Medicare and Medicaid.
A large cadre of research now shows that student debt disproportionately burdens Black borrowers. Not only are Black students more likely to borrow, and to need to borrow more, but they struggle much more with paying back their loans.
Whoever gave you the money for your education (the lender) is usually who owns your student loan. This is either the federal government or a private company. But your loan servicer is who handles the loan repayment—and who dishes out the consequences if you don't pay up.
Soaring college costs and pressure to compete in the job marketplace are big factors for student loan debt. Student loans are the most common form of educational debt, followed by credit cards and other types of credit. Borrowers who don't complete their degrees are more likely to default.
While there are few direct estimates of the effect of debt cancelation in the literature, estimates based on the relationship between wealth and consumption suggest that this forgiveness could increase consumption by several billions of dollars each year in the next five to ten years.
Right now, anyone who receives student loan forgiveness between 2021 and 2025 will not have to pay taxes on any amount of student debt forgiveness. PSLF or IDR forgiveness is a potential result for any borrower. However, not all borrowers will reach forgiveness.
The average federal student loan debt is $37,853 per borrower. Outstanding private student loan debt totals $128.8 billion. The average student borrows over $30,000 to pursue a bachelor's degree.
#1: Massachusetts
According to recent numbers, the Bay State is the most expensive state to raise a child. SmartAsset finds that it costs around $36k per year to raise one child in Massachusetts, with about $21.5k of that going to childcare.
Major expenditure categories are healthcare, Social Security, and defense; income and payroll taxes are the primary revenue sources. During FY2022, the federal government spent $6.3 trillion.
That's because American schools are well known for providing high-quality education through a balanced, tried-and-tested curriculum. The US education system is informed by cutting-edge research, which helps develop students into critical thinkers with well-rounded social-emotional skills.
The ten states with the highest per pupil spending are: New York ($24,040), District of Columbia ($22,759), Connecticut ($20,635), New Jersey ($20,021), Vermont ($19,400), Alaska ($17,726), Massachusetts ($17,058), New Hampshire ($16,893), Pennsylvania ($16,395), and Wyoming ($16,224).
Total debt by age group in the U.S.
Analysis of the debt share in the U.S. shows that people aged 40-49 hold the largest amount of debt at $4.21 trillion in total.
The NDEA evolved into the Perkins Loan Program, which later facilitated the establishment of more comprehensive federal student loan programs under Title IV of the Higher Education Act of 1965, an Act signed into law by President Lyndon Johnson.
Your interest charges will be added to the amount you owe, causing your loan to grow over time. This can occur if you are in a deferment for an unsubsidized loan or if you have an income-based repayment (IBR) plan and your payments are not large enough to cover the monthly accruing interest.