High student debt isn't blamed on a single entity; it's a complex issue involving students/families for borrowing, universities for rising tuition, the federal government for policy & loan programs, and potentially predatory lenders, with shared responsibility often cited, though different groups place blame differently (e.g., older generations focus on individuals, while younger generations are more uncertain).
Who's responsible for the student loan debt crisis? The answer isn't straightforward—it's really a combination of factors involving institutions, the federal government, high schools, students, and parents.
In the case of student loans, the student is responsible for repaying the debt — whether they graduated or not.
Most student debt is owed to the federal government
Notes: Student debt owed to the federal government includes loans that were provided by private lenders or schools but backed by the federal government, such as the Federal Family Education Loan program and Perkins Loans.
President Barack Obama organized all new loans under the Direct Loan program by July 2010. The switch to 100% Direct Lending effective July 1, 2010 was enacted by the Health Care and Education Reconciliation Act of 2010.
During his time in office, President Trump provided temporary COVID-19 relief by pausing federal student loan payments and interest, later extending it, but also signed legislation (the "Big Beautiful Bill") that capped borrowing for grad students, altered repayment options, and made Public Service Loan Forgiveness (PSLF) harder, leading to increased scrutiny and potential garnishments for defaulted loans under his administration's later actions, notes CNN, WPR, NPR, PBS, Yahoo Finance, Student Loan Borrower Assistance, and The New York Times.
Robert F. Smith is a billionaire who did something that changed lives forever. In 2019, he surprised 396 graduates from Morehouse College by paying off all their student loans. The total gift was $34 million but that's not all.
Federal Reserve data shows that about 23% of Americans have no debt.
In fact, it was 2004 before the Obamas paid off the last of their student loans. That's not the future he wants for today's college students.
2. Student debt cancellation disproportionately benefits middle- and high-income families, though income targeting makes cancellation less regressive. 3. A greater share of forgiveness goes to borrowers in a debt trap or facing long repayment horizons when the cancellation ceiling is higher.
In most cases, debt isn't inherited and is often settled by the estate or forgiven.
Student loans can come from the federal government, from private sources such as a bank or financial institution, or from other organizations. Federal student loans usually have more benefits than private loans.
An 800 credit score is considered "exceptional" and, while not extremely common, it's achieved by a significant minority: roughly 23-24% of U.S. consumers have scores of 800 or higher, meaning nearly one in four people falls into this top tier, though far fewer (around 1.5-2%) hit a perfect 850. This level of credit is excellent for securing the best loan rates, requiring consistent on-time payments, very low credit utilization, and a long credit history.
If you repay your loans under an IDR plan, the end of term balance on your student loans may be forgiven after you make a certain number of payments over 20 or 25 years (240 or 300 monthly payments). Use Loan Simulator to compare plans, estimate monthly payment amounts, and see if you're eligible for an IDR plan.
Here are some of the programs with the most student debt based on 2022 median debt: Doctoral degree, pharmacy, pharmaceutical sciences and administration - $310,330. Doctoral degree, mental and social health services and allied professions - $207,407.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Credit score: In general, you will need to have good to excellent credit, a FICO score of 680 or higher, to qualify. An excellent credit score paired with a high income will likely give you the fastest path to approval. Income: Lenders may set specific income requirements for you to qualify.