Everyone knows that student loan debt is a crisis in this country, but not as many people realize just how severe and widespread it is. It's a story best told by statistics, and those statistics show that this is an issue for millions of Americans that shows no signs of abating. Here are five of the most surprising facts about the student debt crisis.
1. Student loan debt is a $1.5 trillion problem
Americans owe more than $1.53 trillion in student loan debt, according to the latest data from the Federal Reserve, and that number shows no sign of decreasing anytime soon. About 44.7 million people carry some student debt.
The driving force behind this crisis has been the rising cost of tuition and room and board at public and private universities nationwide. The cost of attending college has more than doubled in real terms since 1971, according to The College Board. That has meant that families have to set aside larger and larger percentages of their income in order to save enough for a college education. And as they've become increasingly unable to keep up, student loan debt has ballooned.
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2. The average 2018 graduate left school with $29,800 in debt
The average annual salary for a 2018 college graduate is $48,400, according to PayScale, which means that $29,800 in debt is more than half their salary. A sizable chunk of that money will go toward student loan repayment instead of saving for their futures.
The average graduate's student loan debt is enough to put a down payment on a home, buy a new car, pay for a wedding, or even start a business. But for most young adults, these dreams end up deferred for years or even decades while they struggle to repay the cost of their education.
3. The average student loan payment is between $200 and $299 per month
The average college graduate must pay between $200 and $299 per month toward their student loan debt, according to the Federal Reserve. If we assume these graduates are making about $48,400 per year, that comes out to about $4,033 in monthly earnings.
That means between 5% and 7.5% of the average new college graduate's total earnings goes toward their student loans. And keep in mind that their take-home pay will actually be less than $4,033 per month because they'll have taxes taken out of their paychecks.
4. Nearly 11% of student loans were more than 90 days past due
Although this indicates that the majority of student loan borrowers are able to keep up with their payments enough to avoid default, a 10.83% delinquency rate is high compared to that of other types of debt. The Federal Reserve Bank of New York reported that although 10.83% of student loan borrowers can't keep up with their payments, only 8.32% of individuals with credit card debt and only 4.64% of those who are paying off auto loans had the same issue.