The latest student loan debt statistics show that student loan debt totals $1.75 trillion as of April 2022.

Higher education represents a path to financial prosperity and opportunity for millions of Americans. But, due to rising college costs, many students find it necessary to finance higher education with student loans. Unfortunately, some borrowers find it difficult to pay back their hefty debt upon graduation.

The cost of college has steadily increased over the last 30 years. In that timeframe, tuition costs at public four-year colleges grew from $4,160 to $10,740 and from $19,360 to $38,070 at private nonprofit institutions (adjusted for inflation). As costs have risen, so has the need for student loans and other financial aid forms.

When considering your options, it helps to look at the big picture and understand the full impact and scope of student loans. This is a snapshot of student loan debt in the United States in 2022.

Average Student Loan Debt

• $1.75 trillion in total student loan debt (including federal and private loans)
• $28,950 owed per borrower on average
• About 92% of all student debt are federal student loans; the remaining amount is private student loans
• 55% of students from public four-year institutions had student loans
• 57% of students from private nonprofit four-year institutions took on education debt

Here’s how that debt breaks down by loan type.

Federal Student Loan Portfolio

Federal student loans make up the vast majority of American education debt—about 92% of all outstanding student loans are federal debt. The federal student loan portfolio currently totals more than $1.6 trillion, owed by about 43 million borrowers

Federal Student Loans by Age

Unsurprisingly; younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in federal student loans—the majority of people in this age group owe between $10,000 and $40,000.

However, people carry their education debt well into middle age and beyond. Borrowers ages 35 to 49 owe more than $620 billion in student loans. This cohort has the highest number of borrowers who owe more than $100,000 in loans.

Even retirees feel the pressure from student loans; 2.4 million borrowers aged 62 or older owe $98 billion in student loans.

Student Loan Repayment Statistics

Here are the current repayment statuses of the federal Direct Loan program.

Individual student loan debt statistics

Here’s how student loan debt in the U.S. impacts individual borrowers:

• The age group with the most student loan borrowers is the 25 to 34 age bracket, while 7.4 million borrowers are 24 years old or younger.
• In the class of 2020, 55 percent of bachelor’s degree recipients graduated with student loan debt.
• In 19 states, the average student loan debt was over $30,000 for the class of 2020, and it was over $35,000 in six states.
• As of March 2021, 54 percent of borrowers owed less than $20,000 in student loans, and 10 percent owed $80,000 or more.
• The average estimated budget for undergraduates for the 2021-22 school year was $18,830 for public two-year in-district students, $27,330 for public four-year in-state students, $44,150 for public four-year out-of-state students, and $55,800 for private nonprofit four-year students.

Student debt and mental health

Student loan debt can significantly impact a borrower’s mental health. Feelings of anxiety and stress may coincide with any long-term debt, especially if the debt impedes the ability to meet critical financial milestones, like saving for a house or buying a car.

• Taking on too much student loan debt is the biggest financial regret of 10 percent of Americans.
• Forty-two percent of adults and 33 percent of Gen Z reported in 2018 that personal debt, including student loans, is a significant source of stress.
• The financial pressure of student loan payments can lead to stress, anxiety, and depression.

Student loan debt by degree

Advanced degrees are expensive, but the investment could pay off. Here’s what you need to know before taking out graduate student loans, according to the Brookings Institute and MeasureOne:

• Around 25 percent of all undergraduates graduate with less than $20,000 in student loan debt; borrowers who leave school with more than $57,500 have almost always borrowed for graduate school.
• About 25 percent of all student loan borrowers went to graduate school.
• Graduate students account for roughly half of the total outstanding student loan debt in the U.S.
• Those who earn an advanced degree may earn a larger annual income and have increased job security.
• Graduate students are less likely to fall into delinquency with private loans; 2.3 percent of undergraduate balances in repayment are at least 30 days delinquent, while 1.65 percent of graduate balances in repayment are at least 30 days delinquent.

Flexible Financing Could Be a Good Option For You

Under Flexible Financing Like Income Share Agreements; students have more options in higher education because they aren’t limited by finances.

 Because their future funding is dependent on graduates securing paid employment, many schools may offer job search assistance. This helps students feel secure when they are picking a school or program because they won’t have to make payments until they secure a job. 

Schools have little incentives to help graduates find a good-paying job post-graduation under traditional loans because their payments are not tied to the student’s income. A lender will likely have already paid them for your tuition. 

An alternative to traditional private student loans in America is long overdue. We believe flexible Financing is that change.

Sources

• Zippia
• MeasureOne
• Student Loan Hero
• Lendedu
• Student Loan Planner
• First Republic
• Federal Reserve
• The Institute for College Access and Success
•  College Board
• MeasureOne

What are the most important skills that students need to prepare for the 21st Century workforce? More importantly, how can educators, boot camps, and programs help kids gain these competencies? How are universities responding to preparing their students for future employment?

We’re going to break down the top ways schools can help prepare their students for the professional world.

1. Encourage Teamwork

One of the biggest things that students today need to succeed at work is the ability to work as a team. They need to understand how to communicate, compromise and share credit so that they can be a valuable contributing member to projects. This can be taught in school by encouraging teamwork on some projects and assignments.

Students who want a position of leadership should know how to work in teams, manage projects, and meet deadlines. While students may learn these skills in the workplace, there are steps teachers can take to help prepare them for these challenges. Teachers need to dispel the idea that working together is cheating or somehow not what happens in the professional world. In many workplaces, working in teams is a requirement for success. Students must be taught how to work in teams while honoring individual accountability. Part of that will be learning how to give and receive feedback constructively. The other part is self-awareness: an ability to monitor their own progress and realize when they could use coaching or additional materials.

2. Think Towards The Future

In many ways, real-life begins at graduation for students — they begin to put their knowledge into use and manage their own finances and life plans. So schools should focus not just on whether students have learned material, but where it will take students later. Will they be a financial, career, and personal success because of what they learned? And when students ask, “Will I ever even use this in real life?” have an answer — and an example of why they will.

3. Teach Complex Thinking Skills

In the current workplace, it’s not just about getting to the right end, but getting there by the best path. This is something that can be reinforced in colleges or bootcamps by giving students context for decision-making and solving problems.

Jobs in the modern workplace require innovation, creativity, and the ability to look at a task and not only see the outcome, but also imagine different ways to achieve it.  Colleges and universities need to do a better job of teaching these skills. They need to teach students how to think, not what to think.

4. Involve more employers with your school

Adding workplace skills to academic study benefits students, but it also has advantages for universities. Being in touch with employers helps enhance the profile of a university with employers and make them more likely to recruit there. In addition, many national ranking systems use some measure of employment success in their calculations.

Because it involves the students who get involved in a live interview with a real employer, it means that many more recruiters know about the university. Again, this is bound to feed into job offers and help increase the school’s notability.

5. Offer Alternative Financing

The Student Borrower Protection Center reported that outstanding traditional private student loan debt grew 71% in the last decade, outpacing auto loans, credit card debt, and mortgage debt. For many families, the economic pinch is making it even more difficult to qualify for private financial aid.

The private student loan market is dependent on FICO scores and cosigners, so if you don’t have parents with great credit scores that are willing to cosign for your traditional private loan, you’re likely not going to get approved for a private student loan.

There are even students with 700 FICO scores (normally high enough for approval at a good interest rate) being quoted 18-19% interest rates on their loans for college or being rejected outright if they don’t have a cosigner.

In other words, amid uncertain economic times, the barrier to entry into higher education has gotten even higher. News of these trends has spread to universities. A recent survey of university presidents from Inside Higher Ed found that 90% of respondents are concerned about a long-term decline in overall future student enrollment. 

Using Income Share Agreements, we can open the doors to higher education to millions of Americans that either went to college and dropped out because of lack of availability of traditional loans, or that never went in the first place.

By utilizing ISAs, programs have seen higher enrollment, improved retention, and accelerated completion.

Income Share Agreements are making strong headway in the education finance world. Being a financing option that can withstand economic uncertainties such as a pandemic makes them a good option for students and schools alike. 

To be successful today, students need certain skills and key traits to perform well in real-world settings. Teaching students the skills they need in today’s work world in college and bootcamps is important!

Meratas

Meratas provides a full-service SaaS Platform for Schools and Skills-Training Courses to design, administer, and service custom ISA programs. We help institutions create impactful ISA programs designed to promote student accessibility and increase enrollment. 

Our programs are intended to incentivize students, schools, and capital providers to work together to promote and finance only the best educational programs that lead to more successful careers.

If you’re interested in offering an ISA option at your school or program that has been proven to increase student enrollment, there’s no better time to offer one than now! Click here to schedule a call with one of our ISA specialists and get your ISA program up and running today.

Although every effort has been made to provide complete and accurate information, Meratas Inc. makes no warranties, express or implied, or representations as to the accuracy of content contained herein. Meratas Inc

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