How many people in the US have student loan debt?

One of the flagship campaign pledges made by Joe Biden in the build up to the 2020 presidential election was to enact widespread student debt relief. On Friday President Biden appeared at Delaware State University to announce that more than 22 million people had already taken advantage of his Student Loan Forgiveness initiative.

Biden said: “For borrowers out of school, nearly 90% of relief is going to go to people making under $75,000 a year. Let me be clear: Not a dime, not a dime will go to the top incomes, period. It goes to people who really need it.”

In the United States there are more than 43 million people with an outstanding student loan debt, owing a combined $1.6 trillion to lenders.

Of that figure, 34 million borrowers have either a subsidized or unsubsidized direct loan; 3.7 million received a Parent PLUS loan; 1.6 million have a Grad PLUS loan; and 1.5 million borrowers have a Perkins loan.

In addition to those figures, more than 11 million Americans have a consolidation loan, meaning that they have combined multiple loans to simplify their payment and interest situation. There is also a further $131 billion in outstanding student loan debt owed to private lenders, however this equates to little over 7% of the total debt.

The student loan burden is one that falls disproportionately on younger people and has accelerated in recent decades. Graduates aged between 25 and 34 are currently shouldering around $500 billion in federal student loans.

Biden offers meaningful student debt relief

Despite being one of the most well-known campaign promises made by Biden, he remained vague on the specifics until taking office. Many had hoped that he would enact debt relief soon after entering the White House but, aside from extending the pre-existing moratorium, it took him 18 months to pass a forgiveness package.

In late August 2022 it was announced that the Biden administration would be offering $10,000 of student loan forgiveness for borrowers earning less than $125,000 per year, with an additional $10,000 of debt relief for those who had received a Pell Grant during their studies.

At the start of the pandemic, the federal government issued a moratorium on student loan repayments to ensure that borrowers affected by the economic effects of covid-19 were not unduly burdened. Along with the recent batch of student loan debt forgiveness, Biden announced a final extension of the moratorium.

Until 31 December 2022, borrowers with a federal student loan debt will not be obliged to make repayments and will not accrue interest on the debt they already owe. After that date borrowers will automatically revert to their previous situation and will once again be liable for repayments.