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Shocking Student Loan Debt Statistics Based on 2018 Data

21 Jun 2019

In the world of fierce and intense labor competition, many people chase the ability to earn a sufficient amount of money and protect themselves by getting a good job. They invest lots of efforts, time, and money into obtaining a degree from some colleges and universities, hoping that it will give them a new and prestigious start.

Unfortunately, in reality, a huge part of American students end up indebted, and before they can go on with their life, they have to earn money and spend it on the debts they have made to be able to study. This way, an endless cycle is formed, creating tension, depression, and misery. Data on students’ loan debts collected at the end of 2018 present shocking conclusions, demonstrating that for the American youth, the future is far from bright.

General Student Loan Debt Facts

All reports produced in 2018 concerning the loans in different educational establishments have been submitted to the US Federal Reserve, and afterward, they were analyzed attentively. They reveal a terrible but probably expected trend: every year, the number of indebted youth continues to grow. More than that, the general amounts of debts are also growing, becoming downright intimidating.

  • There are 44.7 million young people in the US who have taken a loan and failed to pay it back at this point.
  • 11.5% of student loans have expired, meaning that lots of young men and women are facing charges and even higher interest rates because their obligations haven’t been fulfilled.
  • All in all, there are $1.56 trillion that has to be paid back to American banks by students, and this amount is staggering.  
  • On a monthly basis, median student loan comprises $393, and the average one reaches $222. As you can see, such amount is almost impossible for young people to pay because they have numerous other obligations and they still have to both study and work.

So, debts put promising young people into situations where they are forced to forget about living their life and focus on paying back the loans they have taken. It negatively affects their productivity. More than that, it steals their willingness to work because eventually, the concept of working loses its point, considering they have to give most of what they earn away.  

(Data via the U.S. Federal Reserve and the Federal Reserve Bank of New York)

Student Loan Debt
Average Student Loan Debt at Graduation for Bachelor's Degree Recipients

Public Service Loan Forgiveness Statistics

Some students hope to qualify for loan forgiveness. It’s a great option that can be given if you’re hired by the government or non-profits organizations. Sadly, there are many intricacies that have to be taken into account and that disable most of the students from being granted this forgiveness.    

  • There are 1,173,420 Americans who tried to apply for loan forgiveness.
  • Out of them all, only 19,321 were allowed to submit their applications.
  • Only 55 received the approval and had their loans forgiven.

These numbers are shocking because they show that it’s basically impossible to get loan forgiveness. So, students will be stuck with their debts in the future with no hope of solving this problem.

Federal Student Loan Portfolio: Three Main Categories

There are different loan types, status, and repayment plans. Let’s regard how many people choose what kinds of loans, as well as how they’re dealing with their obligations.

1) Statistics of Student Loan Types

  • Grad PLUS: 1.3 million students took a loan of $67.0 billion
  • Parent PLUS: 3.6 million young people borrowed $89.9 billion
  • Perkins: 2.3 million students took $7.1 billion of a loan of this type
  • Stafford Subsidized: 29.6 million students borrowed $277.5 billion of this type
  • Stafford Unsubsidized:    28.7 million young people took about $489.6 billion
  • Stafford Combined: 33.1 million folks borrowed a staggering $767.1 billion
  • Consolidation: 11.9 million youth borrowed $508.0 billion.

2) Statistics of Student Loan Status

  • Loans in repayment: 17.8 million students managed to pay $623.7 billion    
  • Loans in deferment: 3.7 million asked to postpone $124.3 billion in total    
  • Loans in default: $101.4 billion by 5.1 million students
  • Loans in forbearance: 2.6 million borrowers are allowed to wait before having to pay $111.1 billion
  • Loans in grace period: 1.7 million young people wait before having to start paying $43.9 billion.

3) Statistics of Student Loan Repayment Plan

Graduated repayment plan. It takes up to 10 years, meaning that students have a chance to graduate, find jobs, and start their payments. However, the interest rates begin to increase more and more. There are 3.03 million students who chose this plan and who now have to pay $84.2 billion.    

  • Advance graduated repayment plan. It lasts for more than 10 years, and 320,000 young people have to return $15.1 billion.    
  • Level Repayment Plan. It requires equal payment sums over the term of repayment and offers softest interest rates. It lasts for 10 years or less, and $196.2 billion has to be paid by 10.83 million of Americans.
  • Advance level repayment plan lasts for more than 10 years. 1.69 million students have to pay $76.5 billion.    
  • Income-Contingent plan. It’s calculated based on financial and family situation of a borrower.    660,000 young people have to repay $29.9 billion.
  • Income-Based plan takes the borrower’s income into account. In the US, $168.5 billion has to be returned by about    2.83 million students.
  • Pay As You Earn plan is determined according to how much the borrower earns and how much he or she can pay monthly. 1.27 million youth have to pay $78.9 billion.
  • Revised Pay As You Earn plan follows the same scheme but it covers even more people. 2.45 million young people have to pay $136.7 billion.

Results are pretty depressing. Billions of dollars have to be paid by those who clearly cannot cope with their obligations. So, despite the diversity of loans, getting them is becoming more and more damaging.

Data via Studentaid.ed.gov

More Surprising Statistics Concerning Students’ Loan Debts

An even more thorough look at the facts reveals that the situation with American students’ debts is indeed horrifying. Seeing these shocking numbers, it becomes clear that millions of young Americans have no future. They will be forced to pay for their education for the majority of their lives.

  • Almost 90% of those who graduated from for-profit colleges are in a debt of approximately $40,000 each.
  • Close to 70% of young people who graduated from public and non-profit educational establishments applied for a student loan in the first place, which is an increase from the situation of 2017.
  • Close to 70% of graduates from public educational establishments are indebted for about $26,000 each.
  • 75% of students of private and non-profit colleges have loans of approximately $32,000.

Private Student Loan Debt Statistics In General: History Overview

  • Between 2011 and 2012, about 1.4 million undergraduates applied for private loans.
  • The debt volume began to rise rapidly after that, reaching a staggering $7.8 billion in 2014. As we can see from previously mentioned numbers, it continues increasing.
  • Almost 50% of students who applied for a private loan paid $10,000 tuition between 2011 and 2012. Now, the tuition amounts are rising, which explains the equally rising debts.  
  • About 16% of students preparing for graduation had private loans in 2016, which is much less than the current numbers show.
  • According to the latest facts, interest rates imposed upon private loans reach almost 15%. With such crazy amount, it’s not surprising that students are simply unable to pay everything back.

Graduate Student Loan Debt

What kind of degrees students are paying for most through loans, though? Here’s what statistics show. Note that the numbers unite both groups of students, those who have already graduated as well as those who are still studying.   

  • Master of Arts was picked by 8% of young people and they applied for $58,539 loan to be able to study in their chosen places.
  • Master of Science was obtained by 18% of students who took a $50,400 loan.
  • Medicine and health sciences were selected by 5% of youth who got in the debt of $161,772.
  • Master of Business Administration was chosen by 11% of students who took a loan of $42,000 to pay for this degree.
  • Law was picked only by 4%, but the loan they have to pay reaches a shocking $140,616.
  • Master of Education degree was obtained by 16% of students who are in debt of $50,879.
  • Other master’s degrees were picked by 15% in total and currently, they have to return $55,489.

So, the amounts of student loans increase over time. An upsettingly big number of students cannot afford to pay back what they’ve taken. The situation with American education has to change fast because otherwise, its young people will simply lose all their faith in justice and equality of classes.

(Data via 2012 Newamerica.org study)