30, 2023, is private student loan debt. 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.
Most lenders that originate student loans are large institutions, such as large banks or the federal government.
6. Most student debt is owed to the federal government. Just over 92 percent of all outstanding student debt is owed to the federal government, with private financial institutions lending the remaining eight percent.
Overview of Student Loan Ownership
Federal student loans are typically owned by the U.S. Department of Education (DOE), while private student loans are owned by the private lender who issued them. However, both the DOE and private lenders may partner with a third party known as a loan servicer to manage your loans.
Overall, 32 percent of students have no responsibility in paying for college, while 39 percent pay for some of it, and 29 percent are responsible for all of it.
You're not alone if you are still paying off your student loans from your college education years ago. In fact, many Americans are paying their student loans well into middle age. A 2019 study from New York Life found that the average age when people finally pay off their student loans for good is 45.
Overall, only 1% of all U.S. adults owed at least $100,000. Young college graduates with student loans are more likely than those without this kind of debt to say they struggle financially.
Black adults are more than twice as likely than white adults to have student loan debt. The following graph includes federal and private student loan debt among all adults. On average, Black adults in the U.S. also hold higher student loan debt balances than borrowers of other races.
Higher percentages of Black (88 percent) and American Indian/Alaska Native (87 percent) students received grants than students who were of Two or more races (79 percent), White (74 percent), and Asian (66 percent).
Four years after graduation, black students owe an average of 188% more than white students borrowed. Black and African American student borrowers are the most likely to struggle financially due to student loan debt making monthly payments of $260.
20% of U.S. adults report having paid off student loan debt. The 5-year annual average student loan debt growth rate is 15%. The average student loan debt growth rate outpaces rising tuition costs by 166.9%. In a single year, 31.5% of undergraduate students accepted federal loans.
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.
Let's say you have $200,000 in student loans at 6% interest on a 10-year repayment term. Your monthly payments would be $2,220. If you can manage an additional $200 a month, you could save a total of $7,796 while trimming a year off your repayment plan.
Meanwhile, 1 million people had a federal student loan balance of more than $200,000, up from 600,000 individuals.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
Student loan debt
Young people are more likely to have student loan balances: 24.3% of millennials and 20.2% of Gen Z are in student debt, compared to 14.9% of Gen X, 6.1% of boomers and only 1.4% of the silent generation.
On average, people with student loans have spent just over 21 years paying back their loans. Federal student loans offer repayment plans that last from 10 to 30 years. Private student loan repayment terms vary.
A survey from Morning Consult found that 77 percent of people say that college is difficult to afford, while 52 percent say that even in-state, public universities—which are typically intended to be more affordable options—are not affordable [6].
According to the oft-cited Sallie Mae study “How America Pays for College,” 77% of American families used parent income and savings to pay for some of their kid's college expenses. Another 18% of parents use borrowed funds to pay for some portion of their child's higher education.
The academic experience is certainly one of the most valued aspects. This includes the classes they take, the knowledge they gain, their major, the faculty they get to interact with, and the opportunities for undergraduate research.