With 45 million people now carrying $1.7 trillion in student loans in the United States, student loan payments are a major monthly debt obligation for a growing percentage of the nation.
According to the Federal Reserve, the median payment for student loan borrowers is $222 per month. But this doesn't offer a true reflection of what people are actually paying each month since 38% of respondents said that at least one of their loans were in deferment (meaning they weren't currently making any payments at all).
Among borrowers that are actively paying down their student loans, the average student loan monthly payment is much higher. This article explores the average student loan monthly payment in the US and what you can do to manage your own student loan debt.
Special Note During COVID-19: Currently, student loan payments are paused for most borrowers. Learn about your student loan options during the Covid-19 Pandemic here.
The Average Student Loan Monthly Payment In The US
According to research from the Federal Reserve Bank of New York, the average student loan monthly payment is $393. They also found that 50% of student loan borrowers owe more than $19,281 on their student loans.
Note: Since March 2020, the average Federal student loan payment has been $0 due to the Covid-19 forbearance. The current payment pause is extended through mid-2023.
Below is a list of more notable student loan payment statistics from the Federal Reserve's report:
- Average student loan debt: $39,351
- Median student loan debt: $19,281
- Average student loan monthly payment: $393
- Median monthly payment on student loan debt: $222
- Percentage of borrowers with growing loan balances: 47.5%
- Percentage of borrowers who are more than 90 days delinquent: 4.67%
- Average debt load for 2021 graduates: $30,600 (see the average student debt by graduating class here)
Despite hundreds of dollars going to debt each month, balances aren’t shrinking. Among borrowers who still owe money on their student loans, just 37% of all borrowers saw their student loan balance shrink according to the Federal Reserve Bank of New York. That means a large majority of borrowers, unfortunately, aren’t making any progress.
Average Student Loan Monthly Payment By Repayment Plan
Most people who borrow money to pay for education use federal student loans. These loans come with several protections including Income-Driven Repayment (IDR) plans. Income driven repayment plans mean that your monthly payment is based on your certified income.
With these plans, your student loan balance may grow over time. Any money you put towards your loan pays interest first then principal. In a lot of cases (especially among lower earners) that means that none of the payment goes towards principal at all.
Although your loan balance may grow on an IDR plan, they can certainly improve your cash flow situation. And if you want to pay off your debt faster, you can always pay more than the required monthly minimum.
Below you can see how different payment plans would work for a single person earning $48,000 per year with a $30,000 loan balance (assuming the loan has a 4.5% interest rate).
Payment Plan | Monthly Payment |
|---|---|
Standard 10-Year Repayment Plan |
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REPAYE |
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PAYE |
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Income-Based Repayment (IBR) |
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If you’re interested in exploring different repayment options, check out Chipper. It will do a comparison of all the repayment options based on your personalized information. This is especially important if you’re more focused on managing debt than paying it off.
Other Options For Managing Student Loan Debt
If you feel like you can't afford the average student loan monthly payment on an IDR plan, you might be able to stop payments altogether by applying for a period of forbearance.
All federal student loan borrowers can apply for forbearance at any time at StudentAid.gov. And several private lenders offer hardship forbearance periods of 12 months or more as well. That's a big deal since private student loans don't qualify for IDR plans. These are the best private student loan lenders.
Finally, if your income and credit score are both strong, you might be able to decrease your monthly payment by refinancing your student loans to a lower interest rate. These are the best companies for refinancing student loans.
Final Thoughts
Whether your student loan obligations fall above or below the average student loan monthly payment, joining an IDR plan can be a great way to manage your debt.
But keep in mind that these plans can extend your repayment period by up to 25 years. If you don’t want to deal with your own student loans when you’re sending your own children to college, an intense period of focused debt pay off might be best for you.
Rapidly paying off debt is ideal for people who have an emergency fund, have some time and energy for side hustles or career growth, and don’t qualify for loan forgiveness. If that’s not you (or it’s not you right now), the Standard 10-Year plan or an IDR plan may make more sense.
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.
Editor: Clint Proctor Reviewed by: Claire Tak
