Student loan debt is now the second largest source of household debt in the United States, tied with auto loans.Depending on the data source, average monthly student loan payments for a borrower with a bachelor’s degree are between $512 and $621 every month.Surveys of borrowers suggest that the average length of time it takes for a student to pay off their loans is around 20 years.
Among 2021-22 bachelor’s degree recipients, the average amount of student loan debt is $29,400. That number jumps to $88,220 for borrowers with a graduate degree.
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Borrowers between the ages of 35 and 49 owe more (cumulatively and per borrower) than borrowers from any other age group.
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Average student loan payments are highest for Black borrowers. Among racial groups, Black borrowers are also the most likely to have student loan debt totaling more than $25,000.
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With a monthly payment of $319, it would take the average bachelor’s degree recipient 10 years to pay off their student loan debt. They would pay $8,888 in interest over the course of their repayment period.
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Student loan payment statistics
The standard repayment plan for federal student loans ensures that loans are paid in full within 10 years. For many borrowers, however, repayment of student loans doesn’t go so simply. Surveys of borrowers suggest that it takes the average borrower between 18.5 and 21 years to pay off their loans.
The longer it takes to pay off loans, the more opportunity for interest to accrue and the total amount owed to increase. Federal student loan repayment data show that borrowers between the ages of 35 and 49 actually owe more (both cumulatively and per borrower) than borrowers from any other age group.
Outstanding amount due on federal student loans by age group (as of Q4 2023)
| Number of borrowers (in millions) | Cumulative amount owed (in millions) | |
|---|---|---|
| 24 and younger | 7.1 | $100,000 |
| 25 to 34 | 15 | $491,400 |
| 35 to 49 | 14.6 | $624,400 |
| 50 to 61 | 6.3 | $278,500 |
| 62 and older | 2.7 | $109,800 |
Source: Department of Education
The most recent available figures show that the average student loan debt for a bachelor’s degree recipient is $29,400.The 2023-24 interest rate for federal undergraduate student loans (including both Direct Subsidized and Unsubsidized loans) is 5.50% (for graduate and professional students, the 2023-24 interest rate is 7.05%).Using those figures, you can calculate several sample loan payoff scenarios for an undergraduate student with an average amount of student loan debt.
A standard, 10-year fixed repayment plan for a $29,400 loan would require monthly payments of $319 and would result in a total cost of $38,288 over the life of the loan. An extended fixed repayment plan of 25 years for a $30,000 loan would drop monthly payments to $184 but increase the overall total to be paid to $55,268 (note that extended repayment plans are only available to students who owe $30,000 or more).
Repayment timelines for average student loan
| Monthly payment | Total cost | Amount paid above principal | Time period |
|---|---|---|---|
| $319 | $38,288 | $8,888 | 10 years |
| $400 | $35,933 | $6,533 | 7.5 years |
| $202 | $48,537 | $19,137 | 20 years |
| $184 | $55,268 | $25,268 | 25 years |
Source: Department of Education
Student loan payment by degree type
In 2019-20, The average student who completed an undergraduate degree or certificate program received loans that total $25,670.For those receiving graduate degrees, that number jumps to $88,220.That amount varies significantly by the type of degree received.
Average monthly payments by degree
The Education Data Initiative has put together data estimating average monthly student loan payment by degree type. These data are based on earnings data from the Bureau of Labor Statistics and the assumption that a borrower would put 10% of their income towards student loan payments.
In 2016, the Federal Reserve’s Economic Well-Being of Households survey pegged the average monthly student loan payment at $393 (pre-pandemic figures).Adjusted to 2024 dollars, that equates to an average monthly payment of $512.
Student loan debt in U.S.
Cumulative student loan debt in the U.S. totaled more than $1.7 trillion by Q3 2023, a number that increased by about 53% over the course of the past 10 years. More than half of those who graduate with bachelor’s degrees do so with student loan debt, although that debt is not split evenly between demographic groups. According to a Federal Reserve study, 53% of Black women have student loan debt, while the same is true of only 35% of Hispanic/Latino men.
Estimated monthly payments by race also show that Black students face a higher burden from student loans than students from other racial and ethnic groups.
Monthly student loan payments by race
| Race | Monthly payments |
|---|---|
| Asian | $240 |
| Black | $250 |
| Hispanic/Latino | $239 |
| Native American | $217 |
| White | $201 |
Source: Education Data Initiative
Black borrowers are also more likely than borrowers of other races to have high student loan balances. According to the Federal Reserve, 57% of Black borrowers have at least $25,000 in student loan debt.
Student debt repayment options
Student loans come with a variety of repayment options. Most federal and non-federal loans offer standard fixed repayment plans that ensure loans will be repaid within a certain time frame (commonly 10 years). The majority of student loans also include options for Income-driven repayment plans. These plans can reduce monthly costs, although often at the expense of extending the overall loan term. The most common income-driven plans are income-contingent (ICR), income-based (IBR) and pay as you earn (PAYE).
| Benefits | Requirements | Recipients (in millions) | |
|---|---|---|---|
| ICR | No financial need requirement | 1.00 | |
| IBR | Eligibility based on financial need | 2.46 | |
| PAYE | Eligibility based on financial need | 1.61 |
Source: Department of Education
FAQ
What is the monthly payment on a $30,000 student loan?
Based on a standard, 10-year fixed repayment plan, the monthly payment on a $30,000 student loan would be $326.
What is the average debt after college?
The average student loan debt for a borrower with a bachelor’s degree is between $29,400 and $30,500. The average debt for a borrower with an associate’s degree is $18,920.The average debt for a borrower with a graduate degree is $88,220.
What is the best student debt repayment plan?
The standard repayment plan for federal student loans offers fixed monthly payments and ensures loans are paid off within 10 years. Income-driven repayment plans offer more flexible options tied to income and family size.
References
- Digest of Education Statistics. “Percentage of undergraduate degree completers with student loan debt and average cumulative amount owed, Table 331.95.” National Center for Education Statistics. Evaluated Apr 8, 2024.Link Here
- Digest of Education Statistics. “Percentage of graduate degree completers with student loan debt and average cumulative amount owed, Table 332.45.” National Center for Education Statistics. Evaluated Apr 8, 2024.Link Here
- Hanson, M. “Average Student Loan Payment.” Education Data Initiative. Evaluated Apr 8, 2024.Link Here
- Board of Governors. “Report on the Economic Well-Being of U.S. Households in 2016.” Federal Reserve. Evaluated Apr 8, 2024.Link Here
- Bureau of Labor Statistics. “CPI Inflation Calculator.” Evaluated Apr 8, 2024.Link Here
- Kent, A et al. “Gender and Racial Disparities in Student Loan Debt.” Federal Reserve Bank of St Louis. Evaluated Apr 8, 2024.Link Here
- Hanson, M. “Student Loan Debt by Race.” Education Data Initiative. Evaluated Apr 8, 2024.Link Here
- Federal Student Aid. “Federal Student Loan Repayment Plans.” Department of Education. Evaluated Apr 8, 2024.Link Here
- Hanson, M. “Average Time to Repay Student Loans.” Education Data Initiative. Evaluated Apr 8, 2024.Link Here
- Federal Student Aid. “Federal Student Loan Portfolio by Borrower Age.” Department of Education. Evaluated Apr 8, 2024.Link Here
- Board of Governors. “Report on the Economic Well-Being of U.S. Households in 2022.” Federal Reserve. Evaluated Apr 8, 2024.Link Here
- Federal Student Aid. “Loan simulator.” Department of Education. Evaluated Apr 8, 2024.Link Here
- Ma, J et al. Trends in College Pricing and Student Aid. College Board. Evaluated Apr 8, 2024.Link Here
- Center for Microeconomic Data. “Quarterly Report on Household Debt and Credit, 2023: Q4.” Federal Reserve Bank of New York. Evaluated Apr 8, 2024.Link Here
- Federal Student Aid. “Federal Interest Rates and Fees.” Department of Education. Evaluated Apr 8, 2024.Link Here
- Federal Student Aid. “Portfolio by Repayment Plan (DL, ED-Held FFEL, ED-Owned).” Department of Education. Evaluated Apr 8, 2024.Link Here
