How many people in the US have student loan debt?
Borrowers in the United States owe nearly $2 trillion in federal student loans with repayments set to resume by the end of the summer.
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. At the end of June this pledge was smashed by the Supreme Court, denying tens of millions of students thousands of dollars of debt forgiveness.
In the United States there are more than 43 million people with an outstanding student loan debt, owing a combined $1.78 trillion to lenders. On average, federal student loan debt per person is $37,338 per borrower while private student loan debt averages $54,921 per borrower.
Of that figure, 34 million borrowers have either a subsidised or unsubsidised 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.
The end of Biden’s huge pledge to young Americans
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 it took him 18 months to announce the failed 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. This was challenged in the Supreme Court.
The answer came on 30 June with the Supreme Court’s final ruling of the year which blocked the Biden administration from going forward with the student debt relief plan. President Biden said that his administration is working on a new path forward to provide debt relief under a different law. He cautioned that it will take longer but that he’s directed his team “to move as quickly as possible.”