Updated: Jul 28
Student loan debt has been a growing concern in recent years, and it has become a pressing issue for many students, graduates, and families. According to the latest data available, the current debt of student loans in the United States has reached an all-time high, and it continues to rise.
As of the first quarter of 2021, the outstanding student loan debt in the United States reached $1.76 trillion, according to data from the Federal Reserve Bank of New York. This figure represents an increase of $29 billion from the previous quarter and a $94 billion increase from the same period in 2020. The average student loan borrower owes approximately $37,000 in student loan debt.
The rising costs of higher education have contributed significantly to the increase in student loan debt. According to the College Board, the average annual tuition and fees at a four-year public college in the United States increased by 1.1% between the 2020-2021 and 2021-2022 academic years. The average annual cost for tuition and fees at a private nonprofit college increased by 3.3% during the same period.
The COVID-19 pandemic has also had a significant impact on student loan debt. In March 2020, the federal government implemented a temporary pause on federal student loan payments and interest accrual as part of the CARES Act. This pause was initially set to expire in September 2020 but was extended several times. As of April 2021, the pause is set to expire on September 30, 2021.
According to a report by the Federal Reserve, the student loan delinquency rate (90+ days past due) was 8.6% in the first quarter of 2021, down from 9.4% in the same period of 2020. However, this figure does not include loans in deferment or forbearance, so the true delinquency rate may be higher.
Student loan debt has a significant impact on the financial well-being of borrowers. A study by the Brookings Institution found that student loan debt is associated with lower homeownership rates, lower retirement savings, and lower net worth. The study also found that the burden of student loan debt falls disproportionately on low-income borrowers and borrowers of color.
The current debt of student loans in the United States is a growing concern, with outstanding student loan debt reaching $1.7 trillion as of the first quarter of 2021. The rising costs of higher education and the impact of the COVID-19 pandemic have contributed significantly to the increase in student loan debt. The student loan delinquency rate has decreased, but the true rate may be higher. The burden of student loan debt falls disproportionately on low-income borrowers and borrowers of color, and it has a significant impact on borrowers' financial well-being.