The amount of student loan debt in the United States continues to grow - with over $1.7 trillion in student loans outstanding. This includes both Federal and private loans. Almost 45 million Americans currently have student loan debt.
The stats around student loan debt are scary, but how do you compare? We've broken down millennial net worth by age - and today we're tackling average student loan debt by age - or rather by the year you graduated college.
While we would ideally like to hypothesize how much debt you have by age, that's near impossible. But luckily we've been able to compile statistics by the average student loan debt amounts by the year you graduated college.
It's important to note that, even with the student loan pause due to Covid-19, student loan debt numbers were still growing. New graduates still had to borrow to pay for school - and current college students are borrowing student loans right now. It's impossible to break the student loan debt cycle until the cost of higher education is addressed.
With that in mind, let's break it down.
The Current State Of Student Loan Debt
First, let's break down the current state of student loan debt in 2021:
- Average Student Loan Debt: $39,351
- Median Student Loan Debt: $19,281
- Average Student Loan Payment: $393
- Median Student Loan Payment: $222
You can find the full breakdown of the average student loan payment in our other study here.
From 1990 to 2013, the growth of student loan debt surpassed the growth in students, going from $24 billion to $110 billion per year, a 352% increase in loans. During that same period, the number of students borrowing increased by 40%:
The increase in borrowing coincides with an increase in tuition.
Going into 2011, 90+ days student loan delinquencies were rising. After a small dip, they jumped to well over 11% at the beginning of 2018 and have since leveled off. You can find out more here.
Average Student Loan Debt By Year
How do you compare to other students who graduated in your class?
Here's the average debt by year of graduation. These numbers are the "at graduation" number, for students who graduated with a bachelors degree. As you can see from above, the numbers then grow after graduation...
Remember, numbers will typically be higher for grad school or other programs.
Average Student Loan Debt
Read the study here.
The Rapid Climb Of Tuition
Large increases in tuition aren’t a recent phenomena. Tuition began rising steadily in the 1980s. Take a look a the chart below? Politicians aren't wrong when they say you used to be able to afford college!
Could you image only paying $617 per year to attend school? Well, that's what it would have cost (not adjusted for inflation). Even when you adjust the 1977 dollar to 2021 for inflation, you're still only at $2,607 per year!
The following are for four year public schools (the data is hard to come by, but we sampled from the past 4 decades):
Cost of Tuition
1976 - 1977
1979 - 1980
1983 - 1984
1987 - 1988
1997 - 1998
2007 - 2008
2012 - 2013
2018 - 2019
2019 - 2020
** Note: the above table is inflation-adjusted for 2021 dollars. Read the report here.
How Much Student Loan Debt Should You Have?
The short answer: as little as possible.
The long answer: it depends on the ROI of your college degree.
The amount of student loan debt really depends on how much you earn after college. Remember, the goal of your student loan debt was to advance your career goals, which in turn should earn you more money.
Furthermore, it's important to remember that the collateral of your student loan debt is your earnings.
To make your student loan debt "worth it", you need to maximize your earnings potential.
A good rule of thumb is to never borrow more than you expect to earn in your first year after graduation. For most average student loan debt borrowers this year (where the average is $30,600), that's possible in most career choices.
Where people really get into problems is when they borrow way more than average. Even if you borrow above average, you can see an ROI if you are going to receive student loan forgiveness.
Average Student Loan Debt FAQs
Here are some common questions we get about the average student loan debt all the time:
How much is the average student loan debt?
The average student loan debt in 2021 is $39,351.
How much is the median student loan debt?
The median student loan debt in 2021 is $19,281.
How much student loan debt did graduates in 2020 have?
The average graduate with a bachelor degree in 2021 will have $30,600 in student loan debt.
How much student loan debt is there in total?
Currently, there is $1.7 trillion in outstanding student loan debt. The bulk of this debt is Federal student loan debt, followed by private loans.
Student loan debt can be worth it - if the loans are borrowed with a clear ROI.
Where most borrowers get into trouble is that they borrow way more than average. They also take on large amounts of private student loans, which have fewer repayment plan options compared to Federal loans.
So, if you have student loan debt - how do you compare? Were you (or are you) above average or below average for your class?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.