Student Debt Data
pThe a href=https://www.nytimes.com/2022/05/13/your-money/student-loan-forgiveness.htmlstudent debt debate/a continues, and I thought it would be helpful to present some data to give a sense of how serious the problem is. Of course, when something goes from “fine” to “crisis” will vary from observer to observer, and for individual borrowers the weight of their debt could feel like anything from a financial gnat to an elephant./ppI’ll highlight just a few things. Reporting total student debt – $1.8 trillion! – is common in media reports, but insufficient to grasp the situation. You need to at least know how many borrowers there are, what they borrowed for, and the expected payoff./ppAs itemized below, the payoff from a four‐year degree and beyond tends to be high, with a recent bachelor’s grad who borrowed likely to see only 6.2 percent of their starting salary go to repaying their loan. And many undergrads – 45 percent – did not borrow. Also, grants now constitute a much larger share of undergraduate aid than loans./ppThat said, there was a large share of debt that was not in “normal” repayment – in‐school, grace, or repayment – right before COVID-19 hit and basically everyone was put in zero‐interest forbearance. That suggests many people were having at least some difficulty repaying. Also, African Americans tend to have higher debt burdens than others, and shares of borrowers having repayment problems, supporting concerns about racial disparities. Still, there does not seem to be a student debt problem so great that it justifies mass cancellation, especially remembering that taxpayers will have to cover whatever is not repaid./ppNote that all data are from the most recent sources of which I am aware, which run from 2016 to 2022./ppa href=https://fred.stlouisfed.org/series/SLOASTotal Student Loan Debt/a: $1.8 trillion/ppa href=https://studentaid.gov/data-center/student/portfolioTotal Federal Student Loan Debt/a: $1.6 trillion/ppa href=https://studentaid.gov/data-center/student/portfolioTotal Federal Borrowers/a: 43.4 million/ppa href=https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Education_Installment_Loans;demographic:all;population:1;units:haveShare of Families Holding Student Debt/a: 21%/ppFederal Debt per Borrower: $37,004 (Total Federal Debt/Total Federal Borrowers)/ppa href=https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdfShare of Bachelor’s Students Graduating with Debt/a: 55%/ppa href=https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdfAverage Bachelor’s Student Debt at Graduation, Just Borrowers/a: $28,400/ppa href=https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdfAverage Bachelor’s Student Debt at Graduation, All Grads/a: $15,600/ppa href=https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdfFederal Loans as Share of All Aid, Undergrads/a: 26%/ppa href=https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdfFederal Loans as Share of All Aid, Grad Students/a: 65%/ppa href=https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdfShare of Undergrad Aid, Grants, Loans, Other Aid/a:/pp
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img width=993 height=849 alt=Student Aid Shares by Type loading=lazy class=lozad d-print-none image-style-pubs-2x component-image data-src=/sites/cato.org/files/styles/pubs_2x/public/2022-05/Grants%20vs%20Loans.png?itok=knVBfnNm typeof=Image /div class=d-none d-print-block component-image lozad-print-friendly-image data-background-image=/sites/cato.org/files/styles/pubs_2x/public/2022-05/Grants%20vs%20Loans.png?itok=knVBfnNm/div
/div/ppa href=https://studentaid.gov/data-center/student/portfolioDebt Range/a:/pp
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img width=1400 height=1017 alt=Student Debt Amount Range loading=lazy class=lozad d-print-none image-style-pubs-2x component-image data-src=/sites/cato.org/files/styles/pubs_2x/public/2022-05/Student%20Debt%20Ranges.png?itok=rnjUb5KH typeof=Image /div class=d-none d-print-block component-image lozad-print-friendly-image data-background-image=/sites/cato.org/files/styles/pubs_2x/public/2022-05/Student%20Debt%20Ranges.png?itok=rnjUb5KH/div
/div/ppa href=https://cew.georgetown.edu/cew-reports/collegepayoff2021/Lifetime Earnings above High‐School‐Only/a:/pblockquotepSome College: $0.3 million/p/blockquoteblockquotepAssociate’s Degree: $0.4 million/p/blockquoteblockquotepBachelor’s Degree: $1.2 million/p/blockquoteblockquotepMaster’s Degree: $1.6 million/p/blockquoteblockquotepDoctoral Degree: $2.4 million/p/blockquoteblockquotepProfessional Degree: $3.1 million/p/blockquotepa href=https://www.naceweb.org/job-market/compensation/salary-projections-for-class-of-2022-bachelors-grads-a-mixed-bag/Average Starting Salary, New Bachelor’s Graduate/a: $55,260/ppa href=https://www.bankrate.com/loans/student-loans/student-loan-calculator/Average Monthly Payment, Undergrad Who Borrowed, Standard (10‐Year) Plan, 4% Interest/a: $287.54/ppAverage Annual Payment As a Share of Salary [($287.54*12)/$55,260] * 100: 6.2%/ppa href=https://nces.ed.gov/programs/raceindicators/indicator_reb.asp#:~:text=Of%20the%2016.3%20million%20undergraduate,and%2047%2C000%20were%20Pacific%20Islander.Share of Undergraduate Enrollment, by Race/a:/pblockquotepWhite: 56%/p/blockquoteblockquotepAfrican American: 14%/p/blockquoteblockquotepHispanic: 19%/p/blockquoteblockquotepAsian: 6%/p/blockquoteblockquotepOther: 5%/p/blockquotepa href=https://nces.ed.gov/programs/coe/indicator/chbShare of Graduate Enrollment, by Race/a:/pblockquotepWhite: 62%/p/blockquoteblockquotepAfrican American: 14%/p/blockquoteblockquotepHispanic: 12%/p/blockquoteblockquotepAsian: 8%/p/blockquoteblockquotepOther: 4%/p/blockquotepa href=https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Education_Installment_Loans;demographic:racecl4;population:1,2,3,4;units:meanAverage Debt by Race/a:/pblockquotepWhite: $40,170/p/blockquoteblockquotepAfrican American: $44,880/p/blockquoteblockquotepHispanic: $30,890/p/blockquoteblockquotepOther: $40,400/p/blockquotepa href=https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Education_Installment_Loans;demographic:racecl4;population:1,2,3,4;units:meanShare of Population with Student Debt, by Race/a:/pblockquotepWhite: 20%/p/blockquoteblockquotepAfrican American: 30%/p/blockquoteblockquotepHispanic: 14%/p/blockquoteblockquotepOther: 24%/p/blockquotepa href=https://studentaid.gov/data-center/student/portfolioRepayment Status as of Q1 2020, Most Recent before COVID-19 Repayment Freeze/a:/pp
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img width=1400 height=1016 alt=Shares in Repayment Statuses loading=lazy class=lozad d-print-none image-style-pubs-2x component-image data-src=/sites/cato.org/files/styles/pubs_2x/public/2022-05/Student%20Debt%20Repayment%20Status.png?itok=6SJG7P-t typeof=Image /div class=d-none d-print-block component-image lozad-print-friendly-image data-background-image=/sites/cato.org/files/styles/pubs_2x/public/2022-05/Student%20Debt%20Repayment%20Status.png?itok=6SJG7P-t/div
/div/ppa href=https://www.federalreserve.gov/publications/2017-economic-well-being-of-us-households-in-2016-accessible.htmDebt Paid or Not Behind, by Race/a:/pblockquotepWhite: 96%/p/blockquoteblockquotepAfrican American: 80%/p/blockquoteblockquotepHispanic: 77%/p/blockquote