What are we talking about when we say that there is a student debt crisis? Just how many Americans have student debt? How much money do they owe? Read this article to learn the answers to these (and other) questions.
We all know that the United States is in a student debt crisis, but do we have a sense of the concrete meaning and impact of that statement? If you want to get a better sense of just how the U.S. is paying for higher education, check out these 9 student debt statistics that everyone should know.
1. More than 42 million Americans have student loan debt.
There's a reason that it seems like many of the people you know are struggling with student debt. According to the Federal Student Aid Office, there were 42.6 million recipients of federal student aid in the second quarter of 2018. That represents one in four Americans.
2. The total outstanding federal student loan debt as of March 2018 is $1.4 trillion.
To be specific, the Federal Student Aid office reports a total of $1,407.1 billion (or $1.4 trillion) in outstanding student loan debt as of the second quarter of 2018. To put it in perspective, if you spent one dollar every second around the clock, it would take you 437,763 years to spend that much money.
3. The average student loan borrower from the class of 2017 owes about $40,000.
4. The average bachelor's degree holder takes 21 years to pay off their debt.
If you're wondering how long it takes to pay off all of this debt, U.S. News and World Report tells us that it's about 21 years. This is more than twice as long as the standard federal 10-year loan repayment plan.
5. 68% of 2015 graduates from public and non-profit colleges had student debt.
Most current college graduates have student debt. According to Make Lemonade, almost one in seven graduates of American public and non-profit colleges in the year 2015 had student debt weighing on them.
6. Student loan payments have increased more than twice as fast as the rate of inflation.
In 2016, the average monthly student loan payment was $393. That's 55% higher than it was in 2005, when the typical monthly student loan bill was $227. Compare this 55% increase with the rate of consumer price inflation over the same time period, 22.9%. That's almost twice as much.
7. Student loans have the highest rate of delinquency.
Does it sound like it'd be challenging to pay off so much student loan debt? It is. According to Comet Financial Intelligence, by the end of 2017, 11.2% of student loans were more than 90 days overdue. To put that in perspective, the credit card delinquency rate was 7.5% and the auto loan delinquency rate was 4%.
8. For every 10% in student loan debt a person holds, their chance of home ownership drops 1 to 2% during the first five years after graduation.
Buying a home is challenging enough, but it's even more difficult for the 42 million Americans who have student debt. According to CNBC, more than 80% of people between the ages of 22 and 35 who haven't purchased a home blame their student debt for their inability to do so. This is most likely related to the large chunk of a person's monthly income that loan payments eat up and the fact that almost one in five student debt holders who apply for a mortgage are denied due to their 'debt-to-income' ratio.
9. In 2016, about 4 out of 5 grads with state student loan debt attended college in 1 of 4 states.
According to Forbes, Texas, Minnesota, Massachusetts, and New Jersey accounted for 80% of the state loan debt from 2016. And only 14% of college graduates come from those states. While these four states were disproportionately represented in state loan debt, average debt in 17 states was over $30,000.
Which of these statistics did you find the most surprising? Let us know on Twitter @studydotcom.
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