Student Loan Debt by Generation

Report Highlights. The average student loan debt increased for all generations – It increased on average by 1.04% from 2022 to 2023.

• Generation X carries the highest average balance at $44,290 per borrower.
• Baby Boomers held the second-largest amount of average debt at $42,520.
• 21.2 million Generation X individuals have student loan debt, more than any other generation.
• Millennials carry an average balance of $32,800 per borrower.

National Student Loan Debt

With federal student debt totaling $1.63 trillion, the majority of federal student debt is concentrated with Generation X. The average Baby Boomer with student loans tends to owe more than the average Millennial. However, on the national scale, Millennials have a larger overall debt than Baby Boomers.

• Generation Z held 5.98% of the total $1.63 trillion student loan debt.
• Millennials held 30.26% of the total debt.
• Generation X held most of the debt at 56.73%.
• Baby Boomers owned 7.01% of the federal student debt.

Number of Borrowers per Generation

Generation X makes up the largest number of federal loan borrowers. They have consistently been the largest age group since 2017 even as the number of Millennial borrowers steadily decreases per year. Interestingly, the number of borrowers from the older generations has steadily risen since 2017.

• Generation Z has 1.88 million borrowers who owe $10,000 to $20,000 in debt.
• Millennials have 3.87 million borrowers who owe $20,000 to $40,000 in debt.
• Generation X has 2.48 million borrowers who owe $40,000 to $60,000 in debt.
• Baby Boomers have 0.25 million borrowers who owe $40,000 to $60,000 in debt.

Debt by Age & State

Throughout all the age groups, California consistently held the highest amount of debt out of all the other states. Wyoming had the smallest population of borrowers throughout all the generations. This data set includes Washington D.C., Puerto Rico, and other U.S. territories in the other category.

• Puerto Rico accounts for $10.3 billion of the national debt.
• Puerto Rico accounts for 338,100 of the total borrower population.
• U.S. territories account for $4.4 billion of the national debt.
• U.S. territories account for 92,800 of the total borrower population.

Generation Z

Year after year, Generation Z sees the largest increases in their personal loans and mortgage balances. Generation Z is also on track to becoming the most educated generation. More of their generation attend college after high school compared to previous generations – which may also increase the size of their overall student loans.

• 57% of Generation Z go into college at the age of 18 to 21 compared to 52% of Millennials at that age and 43% of Generation X.
• Studies find that as more of Generation Z go to college, they are also less likely to be a part of the workforce – delaying repayment of loans such as student debt.
• 595,200 borrowers are from Texas – making it the state with the largest number of borrowers from Generation Z.

Millennials

Millennials carry the 2nd highest student loan debt behind Generation X and Millennials. As a result of their outstanding student loan debt, Millennial home ownership has fallen since the 2000s and early 2010s. Millennials are also taking longer to finish their degrees, thereby increasing their debt the longer they are in school.

• 40% of those Millennials who start college do not finish their degree within six years.
• Baby Boomers on average bought their first home at age 25, Millennials by comparison are projected to buy their first home at age 35.
• From 2005 to 2014, homeownership among Millennials dropped by 9 percentage points.
• In a survey of 1,648 Millennials by the AARP, 25% of Millennials stated that student loan debt prevented them from moving out of their current home.
• 1.45 million borrowers are from California – making it the state with the largest number of borrowers from this generation.

Generation X

Statistics indicate Generation X has the highest student loan debts on average and on the national scale compared to the other generations. Generation X demonstrated their ability to rebound from financial loss after the Great Recession when they recovered the most money out of all the other generations. Despite their ability to bounce back, Generation X remains pessimistic about retirement because of debts like student loans.

• 44% of Generation X say they are not confident about retirement compared to 35% of Millennials and 40% of Baby Boomers.
• In a survey of 1,530 Generation X by the AARP, 38% of those surveyed stated student loans prevented them from saving for retirement.
• At 1.73 million, California is the state with the most number of Generation X borrowers.

Baby Boomers

In addition to their own student loans, Baby Boomers are likely to assume debt on behalf of their children’s higher education. Those Baby Boomers who are retired and receiving Social Security benefits may find their benefits garnished if they default on federal student loans like the Parent PLUS loans.

• An AARP survey found that 77% of Baby Boomers who took out loans for someone else, did it on behalf of their children’s education.
• At 238,000 borrowers, California had the least number of individuals in debt who were Baby Boomers. 

Debts Change Over Lifetime

Age is a significant factor in the likelihood of holding substantial debt other than student loan debt. Older age groups typically see Mortgage and Home Equity Lines of Credit as their greatest financial burdens.

• Student loans are more likely to account for 30% or more of Generation Z’s total debts.
• Student loans tend to peak at between 30-39 years old.
• Starting with Millennials, student loans accounted for less than 13% of their overall debt.
• Mortgages on the other hand accounted for more than 65% of debt for the Millennial group and older age groups.
• However, Generation X and Baby Boomers carry more student loan debt on average than college-age groups in addition to all their other forms of debt.

Sources

1. U.S. Department of Education (ED) Federal Student Aid Office (OFSA): Federal Student Loan Portfolio 
2. Pew Research Center Social & Demographic Trends, On the Cusp of Adulthood and Facing an Uncertain Future: What We Know About Gen Z So Far 
3. American Association of Retired Persons (AARP): Across Generations, Struggles with Student Loan Debt 
4. Federal Reserve Bank of New York: Center for Microeconomic Data 
5.  NCES: Postsecondary Graduation Rates 
6. Baby Boomers and the Future of Homeownership in the United States – Berkeley Economic Review 
7. Wealth Watch: Gen Xers are the most worried about their financial health.