Average Student Loan Debt by Year

Report Highlights:

• The average monthly student loan payment for the Class of 2021 will be $433.
• The average student loan debt per borrower at graduation will be $36,900.
• Student loan debt at graduation has increased 76% since the Class of 2000, a growth rate that outpaces the rate of inflation by 41%.
• After adjusting for inflation, the average student loan debt at graduation has increased 326% since 1970.
• Since 2003, the national total student loan debt balance has grown by 602.5%.

As the cost of a college education rises and prospective students seek out ways to pay for school, more students find themselves taking on greater amounts of student loan debt. Despite the rising cost of tuition, graduates who have been out of school for years may owe more than new graduates due to interest rates.

For related research, see reports on Student Loan Debt Statistics | Student Loan Debt by State | Average Time to Repay Student Loans | Average Cost of College | How Do People Pay for College? | Student Loan Refinancing

As of the third fiscal quarter in 2020, only 7.6% of student loans are currently in repayment. The amount of student loans in default and deferment decreased, while the amount of student loan debt in forbearance increased 375%. In terms of the national total of outstanding student loan debt, 59.8% of all debt is from loans currently in forbearance until September 2021.

Student Loan Debt by Graduation Year

One rough guide for determining debt rates by graduation year is the average student debt by age. A significant portion of students, however, do not graduate at the traditional age of 22. Another rough estimate uses the average debt at graduation as well as the average starting salary for graduates.

• The average debt per student borrower is $36,900.
• Many guides reference the average debt per enrolled student, which is $30,000. Note: these are often the only parameters available for historical, pre-21^st Century data.
• The average salary for bachelor’s degree holders will be higher than the average starting salary for new graduates.
• Ideally, indebted borrowers would make payments based on 10% of their annual income.
• In practice, many borrowers make monthly payments based on a lower percentage; this is potentially influenced by other economic factors, such as the rising cost of living.
• Ideally, all students who graduated before 2015 will have repaid all their educational loan debt.
• Reality does not reflect this ideal, as it takes the average student borrower up to 20 years to pay off their loans.
• Reports of the average student debt are often based on total enrollment as opposed to the average debt per borrower.
• Current debt estimates are based on interest rates and payment plans, not taking into account loans in forbearance or default.

*These loan payments are estimates based on that year’s average salary among bachelor’s degree holders.
**This is a rough projection based on recent trends.

†Payment estimate based on recent trends.
**This is a rough projection based on recent trends.

Total Student Loan Debt Balance

The national student loan balance has risen steadily over the past 50 years and is currently approaching $1.7 trillion.

• The national student debt surpassed $1 trillion in 2012.
• The growing total reflects growth in the average debt per borrower as well as the borrowing rate among the nationwide student population.
• Since 2003 and before adjusting for inflation, the national total student loan debt balance has grown by 602.5%.
• Adjusting for inflation, the total student debt balance has grown 389.5% since 2003.
• The total student loan debt has grown at an annual rate of 35.3%; meanwhile, the cost of college has increased at an annual rate of 5.2%, and the value of the US dollar has grown at a rate of 2.5%.
• The total national student loan debt balance has outgrown the value of the US dollar by 1,312%; the enrolled student population has increased by 4.7%.

Student Loan Debt at Graduation

Among graduates with Bachelor’s degrees, debt may range from a few hundred to tens of thousands of dollars. The average public university graduate typically owes much less than the average graduate of a private, for-profit institution.

• $30,000 is the mean average student loan debt for the past decade.
• $33,600 is the mean average student loan debt for the past decade when adjusted for inflation.
• The current starting salary for bachelor’s degree holders is between $37,500 and $52,000.
• Debt at graduation does not necessarily equal the amount borrowed, since many loans begin accruing interest before entering repayment.
• Even when adjusted for inflation, the average debt at graduation has risen significantly over recent decades.
• 2021 may be the first year since 2015 that new graduates owe as much or less than the previous year’s class at graduation.
• When adjusted for inflation, 2012 was the peak year for student debt at graduation.

**These are rough projections based on recent trends.

Debt per Borrower by Graduation Year

Student loan debt is typically averaged among all students as opposed to the average debt per borrower. This is partially due to the difficulty in tracking how many students have received multiple forms of aid, including aid from private sources that would not be reported as a matter of public record.

• The average debt at graduation divided among all students is lower than the average divided among indebted students.
• Some students don’t borrow any money to pay for college.
• Some students take out multiple loans, meaning the average outstanding loan debt does not divide equally among students.
• The average debt per borrower averages about 15% higher than the average debt per student.

Loan Repayment by Graduation Year

Most indebted student borrowers repay their loans in regular monthly installments. Lump sum payments are rare and usually only happen in the event of student loan default. Income-based repayment plans are common options for federal student loans, especially those that have been consolidated.

• In accordance with federal guidelines, income-based or pay-as-you-earn repayment plans are based on 10% to 20% of the borrower’s income.
• The same federal guidelines recommend a maximum of 36% of one’s income reserved for debts, though this is a much higher rate than any payment plan requires.
• Income-based payments may change according to changes in the indebted borrower’s income.
• Starting salaries are generally much lower than the overall average, meaning new grads make lower monthly payments than indebted borrowers further along in their careers.

‡Projection based on recent economic trends.

Analysis: Student Loans May Fuel the Cycle of Poverty

The average 1996 college graduate left school with $12,750 ($21,509 after adjusting for inflation) in student loan debt. Just over ten years later, students with debt remaining owed an average of $16,500 ($21,233 after adjusting for inflation), with a median debt of $7,200.

Sources

1. George Washington University Graduate School of Education and Human Development, The Evolution of Student Debt in the U.S.: An Overview
2. Utne, Student Debt, By the Numbers
3. Discover, The Rising Cost of College Infographic
4. National Center for Education Statistics (NCES), Fast Facts: Back to School Statistics
5. Timeline: The History of Federal Student Loan Interest Rates
6. Student Loan Interest Rates, Historical Rates
7. NCES, Graduation Rates for Selected Cohorts, 2008–13; Outcome Measures for Cohort Year 2008;
8. NCES, Digest of Education Statistics
9. CNBC, College Graduates Owe $29,000 in Student Debt Now – More Than Ever Before
10. U.S. Federal Reserve, A Few Thoughts on the Recent Deceleration of Student Loan Debt, Accessible Data
11. CNBC, College Grads Expect to Earn $60,000 in Their First Job – Here’s How Much They Actually Make
12. Northeastern University, Average Salary by Education Level: The Value of a College Degree
13. NCES, The Condition of Education 2020
14. Profile of Undergraduates in U.S. Postsecondary Education Institutions
15. ZipRecruiter, Bachelor’s Degree Annual Salary