What is the average college debt after 4 years?
There's a general rule that you shouldn't borrow more in student loans than you expect to make in your first year out of college. A bachelor's degree recipient's average student loan debt in 2021 was $29,100. In theory, a graduate with a salary above this could handle a 10-year standard repayment plan.
There's a general rule that you shouldn't borrow more in student loans than you expect to make in your first year out of college. A bachelor's degree recipient's average student loan debt in 2021 was $29,100. In theory, a graduate with a salary above this could handle a 10-year standard repayment plan.
The average student loan debt amount is slightly over $30,000. However, many borrowers owe $50,000 or more in student loan debt. This isn't impossible to overcome using the right repayment methods.
Among student borrowers, women take out an average of $31,276, while men borrow an average of $29,270, according to a 2021 data analysis by the American Association of University Women. Black women owe a disproportionate amount of student debt.
If you have six figures of student loan debt, you know how daunting repayment can seem. Student loan debt in excess of $100K can cause you to pay thousands in interest charges, and your monthly payments can take up a substantial amount of your cash flow.
In the big world of all US student loans, this is low. The average is around $25,000 plus interest. That is, interest is usually not included in the debt quoted. $10,000 is not that much, and usually, interest payments are not being included, when people say how much they “owe” on their student loans.
It's never too early to look into your student loan options
Depending on your field of study and career prospects, borrowing upwards of $100,000 to fund that degree could be either a smart investment or a big mistake.
If those monthly payments look low compared to what most borrowers pay, it's because most borrowers carry a lot more than $20,000 in student loan debt. As of March 2023, the average federal student loan debt in the United States was about $37,720, according to a BestColleges analysis of Education Department data.
| Total Student Loan Debt | Repayment Period |
|---|---|
| Less than $7,500 | 10 years |
| $7,500-10,000 | 12 years |
| $10,000-$20,000 | 15 years |
| $20,000-$40,000 | 20 years |
- Direct subsidized loans.
- Direct unsubsidized loans.
- Direct PLUS loans.
- Direct consolidation loans.
What is the average student debt by age?
The rise and fall of interest rates are also a logical factor. According to the Federal Reserve, 30-39 year-olds have an average student loan debt of $42,748. 40-49-year-olds possess an average student loan debt of $44,864. Borrowers 24 and younger owe an average of $14,563 in student loan debt.
Most students have two main options for student loans: federal (government) loans or private loans from banks, credit unions, and other lenders. You should research all your options for federal loans, also known as Direct loans, before shopping around for private loans.
A great way to pay off your $100,000 loan faster and save money on interest is to refinance your student loans. This involves taking out a new loan with lower interest rates and/or more favorable terms than the original loan. Refinancing could save you thousands of dollars over the life of your loan.
The general rule is to make sure you don't borrow so much that you'll be paying more than 10% of your expected gross income. The best way to cut down on the total cost of college is to plan ahead.
The average student borrower takes 20 years to pay off their student loan debt. Some professional graduates take over 45 years to repay student loans. 21% of borrowers see their total student loan debt balance increase in the first 5 years of their loan.
Yes, it's a lot. For the 70% of college grads who take on debt, the average has been pretty stable at about $30,000 for the past few years. That's 2/3 more.
The average monthly federal student loan payment for recent bachelor's degree-recipients is about $300. People generally borrow more and have higher interest rates for graduate degrees. Therefore, their monthly payments are higher.
Having a student loan will affect your credit score. Your student loan amount and payment history are a part of your credit report. Your credit reports—which impact your credit score—will contain information about your student loans, including: Amount that you owe on your loans.
According to the Department of Education, at the end of 2023, the average student loan debt for federal loans was about $37,090. That's approximately $1.6 trillion of outstanding debt divided by a total of 43.2 million borrowers. However, what individual borrowers owe varies considerably.
College is a good investment
By 2021, the difference had grown to 62 percent (and closer to 90% for workers with graduate degrees). Currently, California workers with a bachelor's degree earn a median annual wage of $81,000.
Is college worth the debt?
According to a report by the Institute for Higher Education Policy, 83% of schools — serving 93% of undergraduates — provide an ROI within 10 years. That means that within 10 years, students recoup what they would be making with a high school diploma plus the cost of their college degree.
If you've exhausted other options and still need additional funds to help you pay for school, contact your school's financial aid office to find out if you're eligible for additional federal student loans. Just remember to borrow only what you need to pay your educational expenses.
The maximum amount you can borrow each academic year in Direct Unsubsidized Loans ranges from $5,500 to $12,500 for undergraduates, depending on your year in school and your dependency status. Direct Unsubsidized Loans have an annual limit of $20,500 for graduate or professional students.
Current student loan interest rates
About 92 percent of student loan debt is federal, with interest rates ranging from 5.50 percent to 8.05 percent. Average private student loan interest rates, on the other hand, can range from around 4.50 percent to almost 17 percent.
Despite what you may think, paying off your loans as soon as possible isn't always the best thing to do. Getting ahead of your debt is, in general, a smart move; however, if it comes at the cost of avoiding other debt, or overshadowing other benefits you may be receiving, it could set you back in the long run.
