Student Loan Statistics
Updated April 12, 2023
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Student Loans: A Look at the Data
As of September 2021, private colleges charge an average $37,650 annual tuition rate. Students attending in-state public schools pay an average of $10,560 per year. These figures do not include other education-related expenses, such as room and board. Some online learners pay much less than on-campus students. However, degree-seekers in both groups often need loans to finance their education. The average student debt exceeds $36,000.
Although many learners take out loans, student loan statistics show this debt can lead to financial hardships. As a result, degree-seekers should explore alternative options. Examples include scholarships, in-state public schools, and government grants. These options can help learners graduate with as little debt as possible.
Student Loan Statistics
As of 2021, more than 45 million Americans have federal student loan debt, according to EducationData.org. Together, this debt exceeds $1.7 trillion, more than five times the total student loan debt Americans held in 2003. About 65% of college graduates leave school in debt. These student loan statistics suggest that some degree-holders face financial challenges that may prevent them from saving for the future.
Residents of California, Florida, Texas, and New York State hold about 25% of the nation's total student loans, according to Forbes. This statistic correlates with these states' high populations. The District of Columbia, Maryland, and Georgia have the highest average student debt amounts ($41,260-$52,980).
As of 2021, student loan debt statistics show an 11.1% delinquency rate affecting approximately four million Americans. To qualify as delinquent, borrowers must not have made a payment for more than 90 days. These individuals may face severe financial consequences, such as a lower credit score and wage garnishment.
What Is the Maximum Amount of Student Loans in a Lifetime?
As of September 2021, the federal government caps total student loan debt for undergraduates at $31,000 for dependent students and $57,000 for independent degree-seekers. However, independent graduate students may take out an extra $138,500 in federal loans. Students who need extra financial assistance typically pursue private loans.
Lifetime limits for private lenders vary. Banks and other financial institutions rarely lend more than the student's cost of attendance, which includes tuition, room and board, and other education-related expenses.
What Is the Average Student Loan Payment Per Month?
As of June 2021, student loan statistics show that the average loan payment for graduates is $393 per month. This figure includes loan deferments, so many borrowers have much higher payment amounts. Borrowers can reduce out-of-pocket expenses by finding the right payment plan.
A typical 10-year repayment plan features the highest monthly payments. Income-based repayment plans offer lower monthly payments but longer repayment periods. Payment amounts and interest rates for private variable-interest loans may fluctuate without warning.
Can Students Get Loans Without Parents?
Learners may apply for federal loans as independent students. To qualify for independent status, learners must be at least 24 years old, be pursuing a graduate degree, or have children. The federal government also grants this status to veterans and active-duty service members, regardless of age. Independent degree-seekers do not report their parents' financial information on the FAFSA.
Dependent and independent degree-seekers can apply for private loans without their parents' help. But students may need a cosigner.
Does Your Parents' Income Affect Your Student Loan?
For dependent students, their parents' income impacts their expected family contribution (EFC). Other factors influencing EFC include a family's size, assets, benefits, and the number of members attending college. Learners with a high EFC may not qualify for federal grants or unsubsidized loans.
Dependent students with an EFC exceeding their cost of attendance can turn to private lenders. Learners may need private loans if their family does not intend to contribute to their education. Students can also appeal their dependency status with their school's financial aid office.
How Parents Can Help Students Avoid Loans For College
Parents should help their children explore ways to attend college without accruing debt. Families can begin by researching the FAFSA and its effect on federal financial aid eligibility. Parents can also help their children research schools and compare costs. Parents may assist with the scholarship search as well.
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Understand the FAFSA
The Federal Student Aid office provides informative guides for parents and their college-bound children. These resources include financial literacy and career planning checklists for elementary, middle, and high school students. Other guides support graduate learners and nontraditional students.
To complete the FAFSA, college applicants need their social security number or their parents' numbers. They also need tax returns, W-2s, and other financial documents. The FAFSA also requires information about investments. Learners begin the federal aid application process by creating a Federal Student Aid account.
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Research Colleges in Advance
Parents can help their children reduce debt by advising them during the college research process. Families can ensure that learners consider affordable schools and those that offer generous institutional aid packages.
Parents help their children understand each school's total cost by explaining typical education-related expenses. They should also discuss how supplementary experiences, such as studying abroad, can add to a degree's cost. These conversations boost college applicants' financial literacy.
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Know How Much Out-of-State Tuition Costs
Public in-state colleges and universities often offer lower tuition rates than private schools. Parents and students can research these cost differences online or contact schools directly. This research provides information about colleges' costs and financial aid packages. Although private schools usually charge higher tuition rates, financial aid can make some private institutions more affordable than public colleges. Families can estimate each school's cost of attendance using reported data.
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Look Into Scholarships
Merit-based scholarships can help degree-seekers and families avoid debt. Students may qualify for scholarships based on high school grades, extracurricular activities, and accomplishments. Learners can research merit-based scholarships online. Scholarship websites provide details about eligibility requirements and deadlines.
Merit-based scholarship programs can be competitive. To increase their chances of receiving an award, learners should apply for many scholarships. Students can apply for scholarships aligning with their professional interests and academic history.
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