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5 facts about student loans

Americans owed nearly $1.5 trillion in student loans at the end of March 2019, more than double what they owed a decade earlier. This increase came as the proportion of young people in the United States historically enrolled in college and the cost of higher education increased.

Here are five facts about student loans in America, based on a Pew Research Center analysis of recently released data from the 2018 Federal Reserve’s Survey of Family Economics and Decision Making:

1About a third of adults under the age of 30 have student loan debt. Among adults ages 18 to 29, 34% said they have premium student loans for their education. (This includes those who currently have deferred or forgiving loans, but excludes credit card debt, home loans, and other loans taken out for education.) Given only young adults with a bachelor’s degree or higher education, the share of outstanding student debt rises to 49%.

Student debt is less common among the older age groups. Nearly one in five adults between the ages of 30 and 44 (22%) has student loan debt, as do 4% of those age 45 or older.

While the age differences may partly reflect the fact that older adults have more time to pay off their loans, other research has found that young people are now more likely than in the past to take out loans to pay for their education. About six in ten college seniors ages 18 to 24 took out loans for their education in the 2015-2016 school year, up from about half in the 1999-2000 school year, according to the National Center for Education Statistics.

2The average amount of outstanding student debt varies widely depending on the level of educationIn 2016, the amounts owed to students varied widely, particularly by the degree they earned. The average student owed an education loan of $17,000 in 2016. However, the amount owed varied widely. A quarter of borrowers with outstanding debt reported that they owed $7,000 or less, while another quarter owed $43,000 or more. (Due to changes in survey questions, it is not possible to determine the amount due in 2018.)

Educational attainment helps explain this difference. Among borrowers of all ages with outstanding student loan debt, the average self-reported amount among those with less than a bachelor’s degree was $10,000 in 2016. Bachelor’s degree holders owed an average of $25,000, while those with a bachelor’s degree owed an average of $25,000. Those with a graduate degree owe an average of $45,000.

Relatively few student loan debts had six-figure balances in 2016. Only 7% of current borrowers have at least $100,000 of outstanding debt, which is about 1% of the adult population. Balances of $100,000 or more were most popular with graduate degree holders. Among those with a graduate degree and outstanding debt, 23% reported they owed $100,000 or more.

3Young college graduates with student loans are more likely than those without loans to report financial distress. Student loan holders give a more pessimistic assessment of their personal financial situation compared to their peers who do not have outstanding student debt. College graduates between the ages of 25 and 39 who have taken out loans are more likely to say they either find it difficult or take out financial loans (22% vs. 11%). About three in ten young college graduates who have taken out student loans (32%) say they live comfortably, compared to 51% of college graduates of the same age without outstanding loans.

4Young college graduates with student loans are more likely to live in a family with a higher income than those without a bachelor’s degree. For many young people, student loans are a way to make the elusive education a reality. Although these students have to borrow money to attend, the investment may make sense if it increases earnings later in life.

On average, those aged 25 to 39 with at least a bachelor’s degree and outstanding student debt are higher Family income Individual income plus spouse or partner income from those in this age group who lack a bachelor’s degree (regardless of loan status). About half of young college graduates with student loans (52%) live in families that earn at least $75,000, compared to 18% of those without a bachelor’s degree. However, they are still less likely to have this level of family income than young college graduates who do not have outstanding student loans (64%). (Family income reflects more than just an individual’s personal earnings from higher education, including the fact that college graduates are more likely to get married.)

About half (53%) of young adults without a bachelor’s degree live in households with an income of less than $40,000, compared to 21% of young college graduates who take out student loans.

5Compared to young adults without student debt, student loan holders are less optimistic about the value of their degree. About a third (36%) of those 25-39-year-olds with at least a bachelor’s degree and outstanding student loan debt say the lifetime financial costs of their degree outweigh the benefits. By comparison, the 15% of young college graduates who don’t have student loans outstanding say the lifetime costs outweigh the benefits.

About a third of student loan holders believe that the lifetime financial costs of earning a bachelor's degree outweigh the benefitsNote: This is an update to a post originally published on August 24, 2017.

Anthony Silovu He is a former research analyst who focused on social and demographic trends at the Pew Research Center.


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