The following charts illustrate the current state of student debt in the United States. With total debt growing, the number of defaults on the rise, and tuition and fees continuing to increase, it is a situation that is growing more dire each year.
Total Federal Student Loan Debt
Total federal student loan debt, including outstanding principal and interest balances, has been on the rise over the last decade, increasing from $516 billion in 2007 to approximately $1.3 trillion in 2016. The number of borrowers with outstanding loan debt increased during the same period from 28.3 in 2007 to 42.3 in 2016.
Public Service Student Loan Forgiveness Employer Certifications
The total number of borrowers submitting the Employment Certification Form for Public Service Loan Forgiveness (PSLF), which helps to track progress toward loan forgiveness, has increased dramatically over the last several years, rising from 25,683 in 2012 to 552,931 in 2016. Though borrowers are encouraged to submit the form annually, they are not required to do so in order to qualify for loan forgiveness. In practice, this means that the number of borrowers who intend to apply for forgiveness, which is typically granted after 10 years of employment at qualifying nonprofit organizations or government agencies, could be much greater.
Direct and FFEL Borrowers in Default
The total number of Direct and Federal Family Education Loan (FFEL) recipients in default has increased by nearly 25% since 2013. As of 2016, approximately 8.2 million Direct or FFEL loans were in default, a status applied to loans that are more than 360 days delinquent.
Increase in Tuition and Fees from 1977 to Present
One reason for the steady rise in student loan debt may be the sharp increases in tuition and fees over the years. Between the 2001-2002 and the 2016-2017 academic years, tuition and fees at private four-year universities rose by roughly 42%, while rates at public institutions increased by approximately 89%.
*All figures shown are in 2016 dollars
**Average tuition and fee prices reflect in-district charges for public two-year institutions and in-state charges for public four-year institutions
Source: The College Board
How Much More College Degree Holders Earn
While the cost of attending a four-year university continues to increase, a college degree remains tied to higher earning potential. In 2000, college degree holders earned an hourly premium of 52% more than individuals with only a high school education. By 2016, the hourly premium increased to more than 56%.
*All wages are in 2016 dollars
**The regression-based gap is based on average wages and controls for gender, race and ethnicity, education, experience, and geographic division
Source: Economic Policy Institute
Delinquency Status for Direct Loans
Despite declines in the unemployment rate during the same period, delinquency rates for Direct Loans, the federal government’s largest lending program, increased by roughly 8% between 2013 and 2016.
Income-based Repayment Plans
The number of Direct Loan holders enrolled in an income-based repayment plan increased dramatically between 2013 and 2016 from 1.7 million to 5.6 million. Income-based repayment plans such as PAYE and REPAYE set a borrower’s monthly payment equal to a fixed percentage of his or her monthly income.
Total Student Loan Balance by Age
Increasingly, it’s not only the young who are burdened by student loan debt. According to the Federal Reserve Bank of New York, total outstanding debt for borrowers in their 40s, 50s, and 60s has increased markedly since 2004.
Source: Federal Reserve Bank of New York