Student Loan Debt Statistics-2023

The amount of student loan debt in the United States has been on the rise for years, with a few exceptions. From 2006 to 2021, there was a consistent increase each year, with the debt nearly tripling. However, in recent years (2021-2023), there appears to be some fluctuation in the debt figures. While the overall trend is still upward, the rate of increase has slowed down or even plateaued.

The 2023 Q1 and Q2 data show a slight decrease in student loan debt from $1.77 trillion to $1.73 trillion. This drop might be influenced by seasonal factors or changes in the timing of disbursements and repayments.

In the academic year 2022-23, more institutions opted to raise tuition and fees compared to the preceding two years. However, the increases in average tuition and fees at public institutions remain historically low.

When comparing the 2022-23 sticker prices to those of 2021-22, a 1.6% increase can be witnessed for public two-year in-district students, a 1.8% rise for public four-year in-state students, and a 3.5% hike for private nonprofit four-year students, without considering inflation.

However, once factoring in the substantial 8.3% inflation rate, it becomes apparent that the average tuition and fees have actually decreased in all three sectors when comparing the 2021-22 and 2022-23 academic years.

From 2012-13 to 2022-23, public four-year institutions in the United States witnessed a unique trend in tuition and fees. When adjusted for inflation, there was a 1% decrease in published in-state tuition and fees during this period, contrasting with significant increases of 37% and 65% in earlier decades.

Specifically, between 2012-13 and 2022-23, published in-state tuition and fees in the public four-year sector declined by $120 in 2022 dollars, a departure from the past, where increases amounted to $1,820 and $4,370 in prior decades.

Additionally, during this recent decade, overall costs, including tuition, fees, room, and board, increased by 2% at public four-year institutions and 6% at private nonprofit four-year institutions, after accounting for inflation.

Institutional financial aid offices create student budgets, which serve as the foundation for calculating the overall cost of attending an institution. This calculation can impact the level of financial assistance that students qualify for.

For the 2022-23 academic year, typical budgets for full-time undergraduate students vary, with amounts ranging from $19,230 for public two-year in-district students and $27,940 for public four-year in-state students to $45,240 for public four-year out-of-state students and $57,570 for private nonprofit four-year students.

The amount of student loan debt carried by individuals varies widely across different states, influenced by factors such as tuition costs, state funding for higher education, and financial aid availability.

The total outstanding balance of federal student loans varies significantly across states, with California having the highest balance of $149 billion, followed by Texas with $127.2 billion. Conversely, Wyoming has the lowest outstanding balance at $1.70 billion.

It comes as no surprise that the number of borrowers is also the highest in California, with 3,9 million people, while Wyoming has the lowest, with 56 thousand borrowers. Therefore, the balance-to-borrower ratio reveals that states like California and Texas, which have high outstanding balances, also have a large number of borrowers, indicating substantial demand for federal student loans in these populous states. Conversely, states like Alaska and North Dakota have relatively low outstanding balances and smaller borrower populations.

The average published tuition and fees vary widely across states for full-time, in-district students attending public two-year colleges in the 2022-23 academic year. These costs range from $1,430 in California and $2,050 in New Mexico to $8,660 in Vermont.

During the academic year 2022-23, the average tuition and fees for full-time, in-state students attending public four-year institutions varied, with costs ranging from $6,370 in Florida and $6,440 in Wyoming to $17,020 in New Hampshire and $17,650 in Vermont. On the other hand, out-of-state tuition and fees range from $12,942 in South Dakota to $55,334 in Michigan.

In the 2020-21 academic year, state and local funding for public higher education in the US averaged $9,330 per full-time equivalent student. However, this funding varied significantly, with amounts as low as $5,350 in Oklahoma and $5,380 in New Hampshire, exceeding $20,000 in states like Hawaii, Alaska, and Wyoming.

Over the previous decade, when adjusted for inflation, per-student state and local funding increased by an average of 25% nationwide. Notably, 12 states experienced a 50% or greater increase in funding, while five states saw a decline during this period. Federal stimulus funding played a substantial role, accounting for 42% of total state and local funding in Vermont in 2020-21.

Excluding federal stimulus, Vermont still saw a significant 40% increase in inflation-adjusted per-student funding over the decade, highlighting the complex dynamics of federal and state support in higher education finance.

In 2021-22, education borrowing continued its 11-year decline, dropping by $6.6 billion (7%) when adjusted for inflation from the previous year.

Total annual borrowing for postsecondary education, which reached its highest point at $141.6 billion in 2010-11, saw a significant decrease of 33% ($46.9 billion) to $94.7 billion in 2021-22.

Federal Direct subsidized and unsubsidized student loans fell by $49.8 billion (46%) from 2010-11 to 2021-22, while parent PLUS borrowing declined by $2.8 billion (21%). However, Grad PLUS borrowing increased by $3.7 billion (43%) during the same period.

Nonfederal education loans obtained from private lenders decreased from $29 billion in 2007-08 to $10 billion in 2009-10 but rose to about $13 billion in 2021-22, making up approximately 13% of all education loans that year.

In the latest data from Q3 2023, borrowers with debt less than $5,000 have a high number of borrowers, accounting for 7 million individuals, but their total outstanding debt is relatively low at $18.90 billion.

In contrast, those with debt in the range of $100,000 to $200,000 represent only 2.4 million borrowers but have the highest outstanding debt of $335.30 billion, indicating a concentration of debt among a smaller group of high-balance borrowers.

While the number of borrowers varies across debt brackets, the distribution of outstanding debt is uneven, with a significant portion of the total debt concentrated in the higher debt size categories. This suggests that fewer borrowers carry a substantial portion of the overall federal student loan debt burden.

The data indicates a positive trend of decreasing federal student loan debt burdens in 4 out of 9 debt size categories from 2022 to 2023, which reflects a slight improvement in financial conditions for borrowers.

Borrowers with debts of less than $5,000 and between $5,000 and $10,000 show the most substantial decreases in dollars outstanding. At the same time, borrowers in the highest debt category (200K+) also experience a less pronounced reduction.

Despite the decrease in outstanding balances, the number of borrowers in each debt size category remains relatively steady or even increases slightly. This suggests that while the overall debt burden is decreasing, the number of borrowers in these categories remains constant or grows, indicating a continuing need for federal student loans.

While borrowers aged 25 to 34 make up a significant portion of the borrower population, their outstanding loan balances are lower compared to the 35 to 49 age group, which consistently has the highest exceptional balances, reaching $632.10 billion. Meanwhile, borrowers aged 24 and younger have the lowest outstanding balances at $97.80 billion.

The 2022 Q4 to 2023 Q3 data demonstrates some stability in outstanding balances across all age groups, with relatively minor fluctuations. This suggests a certain level of consistency in the Federal Student Loan Portfolio during this time frame.

The total outstanding dollars in billions have decreased gradually from 2017 to 2023. In 2017, the total outstanding student loan debt was $130.30 billion for borrowers aged 24 and younger, but it dropped to $97.80 billion by Q3 2023.

Despite this decrease, the number of borrowers in these age groups has not significantly declined, indicating a relatively steady number of individuals seeking federal student loans.

Moreover, when considering the age categories, the highest outstanding loan balances are consistently observed in the 35 to 49 age group, followed by the 25 to 34 age group.

The Supreme Court struck down Biden’s first plan for broad debt relief using the HEROES Act of 2003, which allowed the education secretary to waive or modify student loan balances in connection with a national emergency like COVID-19 and would have helped 43.5 million people with student loan debt.

Hours after the Supreme Court ruling, Biden announced his Education Department is beginning the process of using the Higher Education Act of 1965. These draft proposals would build on the historic $127 billion loan forgiveness the Biden-Harris administration has already approved for nearly 3.6 million borrowers.

The proposed regulations have classified four categories of borrowers:

• Those who have an unpaid balance that is higher than the amount they initially borrowed.

• Those with loans that started being repaid 25 years ago or more.

• Those who attended programs that left them with excessive debt compared to post-grad earnings, as well as those who went to schools with “unacceptably high” default rates.

• Those who qualify for loan forgiveness under income-driven repayment or Public Service Loan Forgiveness but have not yet applied.

• Borrowers experiencing hardships that are not covered by current forgiveness.