Student loan debt is receiving a great deal of public attention. Here are the numbers:
In 2015, nearly 38% of borrowers (undergraduate and graduate students across all sectors of higher education) owed less than $10,000 and 66% owed less than $25,000.
- Slightly over five percent of all borrowers (undergraduate and graduate students across all sectors of higher education) have student debt of $100,000 or more.
- Average debt per borrower among all bachelor degree recipients at private colleges in 2014-15 was $31,400.
- Total national student debt is $1.2 trillion. However, much of that debt is due to an increased number of Americans who went to college during the recent recession.
Contrary to public perception, it is not the students with the largest loans who are unable to repay them. Very large loans are most often taken out for professional degrees and are repaid because the borrowers have higher incomes upon graduation. Rather, the borrowers who experience the most difficulty commonly have small (under $5,000) loan balances, and did not complete a certificate or degree program.
Numerous press accounts suggest that student debt results in borrowers’ delaying important life activities, such as starting families and buying homes. This question requires further exploration, but research by Beth Akers of the Brookings Institution suggests no long-term negative effect.
The Department of Education reported in September 2016, that average 3-year overall cohort default rates for 2013 decreased slightly from the three prior years to 11%. It remains to be seen if this is a long-term trend—as the economic recovery and the growth in alternative repayment options may have played a role.