Average Student Loan Debt in America 2020

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Last Update: October 17, 2020 College Students Credit Cards Debt Loans Studies
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As the cost of post-secondary education continues to rise, student loan debt across the United States continues to rise with it.

Currently sitting at over 1.5 trillion, student indebtedness and access to affordable education is at the center of American economic and political discourse.

Period: Total Outstanding Student Loan Debt (Billions): Number of Borrowers (Millions): Average Student Loan Debt (Thousands):
2019: Q4 1510,3 42.9 35,205

Using data from the latest US Department of Education: Federal Student Loan Portfolio, our study presents the story on aggregate and also provides a segmented narrative – separating borrowers by loan type, age, total amount borrowed, and across various academic institutions.

Furthermore, we also breakdown the data by the US state and region.

However, before we start: what exactly is the Federal Student Loan Portfolio?

As an office of the US Department of Education, Federal Student Aid directly manages and oversees the Federal Student Loan Portfolio. With help from Enterprise Data Warehouse, the office provides timely, accurate, and consistent data to help improve insight and analytics.

Enterprise Data Warehouse gathers its information from:

  • Postsecondary Education Participant Systems (PEPS).
  • Federal Loan Services.
  • Perkins Loan Schools.
  • National Student Loan Data System (NSLDS).
  • Guaranty Agencies.

Average Student Loan Debt in America 2020: Statistics and Key Findings:

Student loan debt within the United States currently sits at 1,510.3 trillion and averages $35,205 per person. Continuing its meteoric rise – from 2007 to 2019 – student loan debt has increased by nearly 192% over the last 12 years, representing an average annual increase of nearly 16%.

Direct Loans in 2019 are 1,242.6 trillion. This makes 82% of all outstanding student loan debt. The number of recipients is 35.1 million.

Federal loans in 2019 are 261,6 billion. This makes 17% of all outstanding student loan debt. The number of recipients is 12.1 million.

Perkins loans in 2019 are 6.1 billion. This makes less than 1% of all outstanding student loan debt. The number of recipients is 2 million.

Direct student loans come with interest rates that range from 5.05% for undergraduates to 7.6% for parents, graduate, or professional students.

Borrowers in the 25-49 age-cohort make up nearly 71% of all outstanding student loan debt. However, a high percentage is expected due to the increased cost of graduate programs within the age-group.

Borrowers with outstanding debt that range from 20k-40k, 100K-200K, and > 200K represent the largest contributors to total outstanding student loan debt.

Public university debt (617.6 billion) makes the largest contribution to total outstanding student loan debt, while private institutions ($35,444) have the highest average outstanding student loan debt (institutions with borrowers > 1 million).

California (127.2 billion), Texas (99.3 billion), and Florida (84.4 billion) have the highest outstanding student loan debt. However, considering the three states have the largest populations within the US, the figures are expected. Conversely, North Dakota (2.2 billion), Alaska (2.1 billion), and Wyoming (1.5 billion) are the smallest contributors to total outstanding student loan debt.

Average Student Loan Debt in America 2020: Charts, Graph, Analysis

Historical Aggregate Student Loan Debt

When analyzing the data, you get a clear sense of the rising cost of American post-secondary education. Demonstrating a perpetual upward trend, student loan debt has ballooned from 516 billion in 2007 to over 1.5 trillion as of Q4: 2019.

The figure represents a near 192% increase in American student loan indebtedness over the last 12 years, with an average annual increase of nearly 16%.

When assessing the averages, the rising trend is apparent because total borrowers are increasing at a much slower rate. Spiking by roughly 52% over the same time period, total outstanding student loan debt continues to outpace the number of borrowers by nearly 3 ½ times.

Year: Total Outstanding Student Loan Debt (Billions): Number of Borrowers (Millions): Average Student Loan Debt (Thousands):
2007 516 28.3 18,233
2008 577 29.9 19,298
2009 657 32.1 20,467
2010 749.8 34.3 21,860
2011 848.2 36.5 23,238
2012 948.2 38.3 24,757
2013 1,040.2 39.6 26,268
2014 1,129.8 40.7 27,759
2015 1,212.4 41.6 29,144
2016 1,292.2 42.3 30,548
2017 1,366.9 42.6 32,086
2018 1,439.2 42.9 33,548
2019 1510,3 42.9 35,205

Historical Aggregate Student Loan Debt - Total Outstanding Student Loan Debt (Billions) Graph


Historical Aggregate Student Loan Debt - Number of Borrowers (Millions) Graph


Historical Aggregate Student Loan Debt - Average Student Loan Debt (Thousands) Graph

Student Loan Debt by Type

When focusing on the type of debt outstanding, you can see direct loans make up nearly 82% of total student loan debt. Obtained through the William D. Ford Federal Direct Loan Program, direct loans are financed by the US Department of Education, who in turn, obtains their funds from the US Treasury Department.

Current interest rates for direct loans range from 5.05% for undergraduates to 7.6% for parents, graduate, or professional students. Federally regulated, the United States Congress sets interest rate caps to ensure a reasonable cost of borrowing.

2019: Q4 Direct Loans: Federal Family Education Loans (FFEL): Perkins Loans:
Total Outstanding Student Loan Debt (Billions): 1242,6 261,6 6,1
Number of Borrowers  (Millions) 35,1 12,1 2
Average Student Loan Debt (Thousands): 35,205 21,619 3,05‬
[student-loan-debt-by-type-direct-loans-ffel-pl]

What differentiates direct loans from Federal Family Education Loans (FFEL) is FFEL financing is obtained through banks and other private financial institutions. Because of this, borrowers can decide which institution they obtain financing through – which helps create interest rate competition. As well, FFEL loans have a variable interest rate structure, so the cost of borrowing tends to fluctuate with US Treasury yields.

Now, what about Perkins Loans?

Accounting for only 6.1 billion of the 1510,3 trillion outstanding, Perkins Loans offer low-interest alternatives to students with exceptional financial needs. The interest rate is fixed at 5% and the goal of the offering is to help students in unique financial circumstances obtain funds for their education.

Student Loan Debt by Age

When breaking down the data by age, you gain valuable insight into the increased costs of graduate education.

Notice how borrowers in the 25-49 age-bracket make up nearly 71% of total student loan debt?

2019: Q4 ≤ 24 25 – 34 35 – 49 51 – 60 ≥ 62
Total Outstanding Student Loan Debt (Billions): 121.2 501.5 575.5 241.2 75.9
Number of Borrowers (Millions): 8.2 15 14.1 6 2.1
Average Student Loan Debt (Thousands): 14,780 33,433 40,815 40,2 36,142

Due to rounding, totals may differ slightly from aggregate statistics.

[student-loan-debt-by-age-outstanding-student-number-of-borrowers-average-student-loan-graph]

 

And why is this?

Because unlike their undergraduate counterparts, borrowers in these age-cohorts have greater exposure to the higher-costs of graduate programs.

According to a 2017 study by the Urban Institute, tuition for a full-time master’s student within the United States can cost upwards of $25,160 per year, while professional degrees – like medicine and law – can cost up to $71,560 annually.

Student Loan Debt by Amount

While there are few identifiable trends, the data shows student loan borrowers with the highest debt loads fall in the 20k-40k, 100K-200K, and the > 200K range.

2018: Q4 < 5K 5K-10K 10K-20K 20K-40K 40K-60k 60K-80K 80K-100K 100K-200K > 200K
Total Outstanding Student Loan Debt (Billions): 21.5 55.1 133.4 270 202.9 173.2 117.9 301.7 239.8
Number of Borrowers (Millions): 8.3 7.5 9.2 9.5 4.1 2.5 1.3 2.2 0.8
Average Student Loan Debt (Thousands): 2,590 7,346 14,5‬00 28,421 49,487 69,280 90,692 137,136 299,75‬0
[student-loan-debt-by-amount-debt-billions-borrowers-millions-loan-debt-thousands]

Consistent with our age-related findings above, borrowers with debt balances greater than $100,000 are usually graduate students. As well, the higher balances usually result from some combination of yet-to-be-paid undergraduate debt and higher-tuition fees for master’s programs.

Student Loan Debt by Academic Institution

While foreign institutions have the highest average student loan balance, private university tuition often results in the highest cost.

2018: Q4 Public: Private: Proprietary: Foreign: Other:
Total Outstanding Student (Billions): 641,9 501,8 254,6 16,9 100,2
Number of Borrowers (Millions): 25 13,6 12.2 0.2 10,3
Average Student Loan Debt (Thousands): 25,676‬ 36,897 20,868 84,500 9,728

Due to rounding, totals may differ slightly from aggregate statistics.

[student-loan-debt-by-academic-institution-total-outstanding-billions-number-of-borrowers-millions-average-student-loan-thousands-graph]

 

Many private institutions – like Harvard, Yale, and Columbia University – use their Ivy League status to charge higher tuition fees. Considering many of the institutions have outstanding reputations and offer significant job placement opportunities for impending graduates – many student loan borrowers are more than willing to pay the higher tuition to attend.

Conversely, public schools – like the University of California (Irvine), University of Georgia, and Texas A&M University – offer a lower-cost alternative, but don’t provide the same level of prestige as their private counterparts.

Despite that, public student loans still make up nearly 43% of total outstanding balances.

Student Loan Debt by State and Region

2019: Q4: 

Ignoring locations not reported, California, Texas, and Florida are the top three contributors to total outstanding student loan debt. At the opposite end of the spectrum, North Dakota, Alaska and Wyoming are the smallest contributors.

Location Balance (in billions) Borrowers (in thousands)
Alabama $19.0 560.0
Alaska $1.9 61.5
Arizona $25.2 766.0
Arkansas $10.2 337.5
California $120.2 3,492.8
Colorado $23.7 696.5
Connecticut $14.4 445.9
Delaware $3.8 111.3
District of Columbia $5.7 105.2
Florida $79.6 2,243.7
Georgia $55.4 1,457.2
Hawaii $3.7 109.4
Idaho $6.1 200.0
Illinois $52.2 1,487.9
Indiana $24.7 827.6
Iowa $11.5 410.8
Kansas $10.5 351.6
Kentucky $16.0 534.3
Louisiana $17.4 554.2
Maine $5.1 169.1
Maryland $30.0 753.0
Massachusetts $26.2 820.2
Michigan $43.3 1,300.6
Minnesota $22.5 733.2
Mississippi $12.8 387.1
Missouri $24.3 742.3
Montana $3.4 112.2
Nebraska $6.6 226.6
Nevada $9.3 292.8
New Hampshire $5.4 174.1
New Jersey $35.2 1,071.1
New Mexico $6.3 200.0
New York $78.7 2,216.2
North Carolina $39.8 1,160.5
North Dakota $2.1 78.6
Ohio $52.1 1,637.7
Oklahoma $12.2 411.5
Oregon $17.0 492.0
Pennsylvania $54.0 1,639.2
Puerto Rico $7.0 281.7
Rhode Island $3.9 127.2
South Carolina $22.4 643.7
South Dakota $3.0 104.3
Tennessee $25.4 756.2
Texas $94.0 3,081.7
Utah $8.2 273.9
Vermont $2.4 70.3
Virginia $35.4 977.7
Washington $23.4 714.1
West Virginia $6.1 206.4
Wisconsin $19.5 671.1
Wyoming $1.4 48.0
Other $3.5 85.3
Not Reported $0.4 13.6

However, when breaking the numbers down by population – the story makes sense.

According to the US Census Bureau – and its latest December 2018 findings – California, Texas and Florida still maintain their positions as the three highest populated states within the US.

And to that point – the top-10 states in our study with the highest outstanding student loan balances also rank in the top-10 in the overall population.

How We Conducted The Study

Sourced using the latest data from the US Department of Education: Federal Student Loan Portfolio, we dissected the numbers to present the most accurate picture of American student loan debt. Managed by the office of Federal Student Aid, the Federal Student Loan Portfolio is made up of billions of dollars’ of Federal Direct Loans, Family Federal Education Loans (FFEL), and Perkins Loans.

Due to rounding, some of our segmented totals differ from 2019: Q4 aggregate total. As well, all calculated averages are rounded to the nearest dollar and all calculated percentages are rounded to the nearest 1% or 0.10%.

Conclusion

As student loan indebtedness continues to rise across the United States, the data confirms a troubling trend regarding the cost of higher education. When analyzing the numbers on an aggregate level, student loan debt has ballooned by nearly 192% over the last 12 years — increasing from 516 billion in 2007 to over 1.5 trillion in 2019:Q4.

The majority of borrowers are financed through Federal Direct Loans.

Obtained through the William D. Ford Federal Direct Loan Program, direct loans account for nearly 82% of total outstanding student loan balances.

Age demographics also portray a predictable trend.

Borrowers aged 25 to 49 account for nearly 71% of total outstanding student loan debt and students with the highest debt loads fall in the 20k-40k, 100K-200K, and > 200K range.

From an institutional perspective, public and private university students continue to represent the largest contributors to total outstanding student loan debt, with private university students having the highest average debt balance.

So where do we go from here?

When assessing the trends, it’s clear some form of government action is necessary to ensure higher education is more accessible and affordable for future generations.

Sources

US Department of Education: Federal Student Loan Portfolio

Interest Rates for Federal Student Loans

Direct Student Loans vs. FFEL Loans

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