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- The average student loan debt was $29,400 for 2021-22 graduates.
- Higher-income families tend to have higher average student loan debts.
- Student loan debt is highest among Black families, compared with other races.
Understanding student loan debt
Paying down student loan debt can be a challenge, but there are several moves to make if you want to make a dent in your student loan debt.
To gauge if whether or not your student loan debt is normal depends entirely on individual circumstance. Compare your debt to averages for your degree level and age group.
Current trends in student loan debt
National average student loan debt
The average combined federal and private student loan debt among borrowers who graduated in 2021-22 was $29,400 per borrower, according to the most recent data from CollegeBoard.
By household income
Families earning higher incomes tend to have higher student loan balances. Here’s how the average student loan debt breaks down by percentile of income — or where a family falls on America’s income spectrum — according to the Federal Reserve:
According to the Education Data Initiative’s data, 66% of graduate students take out student loans. While graduate school means more time in school, it also tends to mean more debt at a higher interest rate. Federal student loans for undergraduate students disbursed after July 1, 2023 and before July 1, 2024 carry a 5.5% interest rate, while graduate loans are higher at 7.05%.
Average student loan debt by race
Student loans have a disproportionate impact on Black borrowers and their families.
According to 2022 data from the Survey of Consumer Finances (the most recent year for which data broken down by race is available), Black borrowers face significantly more student loan debt than white or Hispanic borrowers. Here’s how the average student loan debt breaks down by race for student loan borrowers:
CollegeBoard points out that the racial wealth gap contributes to this. According to 2022 U.S. Census data, the average Black family has a median income of $51,374 while white families have a median income of $79,933.
Average student loan debt by school type
Private schools tend to be more expensive, and as a result, students at private colleges and universities tend to borrow more. Here’s the debt amount of the average student who attended public versus private college, according to data from CollegeBoard on 2021-22 bachelor’s degree recipients:
Average federal student loan debt
The average federal student loan debt for borrowers who earned their Bachelor’s degree in 2021-22 was $21,200, per borrower, across both public and private institutions.
Average private student loan debt
The average private student loan debt for borrowers who earned their Bachelor’s degree in 2021-22 was $38,300 per borrower, across both public and private institutions.
Impact of student loan debt
Financial impact on borrowers
Student loan debt affects your credit because making on-time payments improves your credit score, while late or missed payments can damage it.
Long-term economic effects
On top of impacting your credit score, missed student loan payments accrue interest which, if ignored, can leave you paying off way more than the loan amount you actually took out. Additionally, borrowers can expect a delay in projected homeownership goals, as well as reduced retirement savings.
Psychological impact
The psychological impact of outstanding debt shouldn’t be minimized, as debt is a major contributor to stress all over the world.
Strategies for managing student loan debt
Repayment methods
Using a debt repayment method like the debt snowball, where you prioritize loans from smallest to largest and build up momentum, or debt avalanche, where you prioritize loans from highest to lowest interest rate to reduce payments over the years, may help you divide your loans into manageable parts to start making progress.
These methods aren’t the only debt-tackling methods out there, but they are two of the most common. Both start by listing out all of your debts and income, and then choosing which debt to put all of your resources towards first. Either is an effective method to start paying off student loan debt, no matter how large your loans are.
Refinancing options
If you have debt from several years ago and haven’t considered refinancing your student loans, now might be the time.
Interest rates are lower than they have been in the past, and refinancing could help you lower your interest rates. People who borrowed federal student loans when interest rates were higher several years ago could lower interest rates and save on interest by refinancing.
However, federal student loan borrowers should be careful before they refinance: By refinancing their public loans into private student loans, they will lose some of the protections of federal student loans like the CARES Act forbearance and interest rate suspension, as well as access to income-driven repayment plans.
Student loan debt FAQs
As of 2024, the current average student loan debt in the U.S. is approximately $30,000 per borrower.
Over the past decade, student loan debt has steadily increased with significant rises in both the number of borrowers and the average amount owed.
The main factors contributing to high student loan debt include rising tuition costs, increased borrowing, and high interest rates on student loans.
To reduce your student loan debt, explore avenues like loan forgiveness programs, income-driven repayment plans, and refinancing options.
The long-term effects of student loan debt include delayed homeownership, reduced retirement savings, and potential impacts on mental health.
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