5 Student Loan Facts Every Student Should Know


Don’t let financial stress ruin your college years! Read these 5 student loan facts to reduce the burden.

Currently, student loan debt in the United States is much bigger than in other countries, with more than 40 million Americans paying off debt from college. “The student loan debt has rocketed from $345 billion to a whopping $1.7 trillion as of Q1 2021.” Whether you are about to take out your first loan or have already begun paying, you will definitely want to learn about these 5 student loan facts in order to ease the burden.



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What is Student Loan Debt?

If you are applying for college, your school will likely provide assistance with your student loan as part of your financial aid package. Make sure you talk with an advisor about different options, like federal vs. private loans.


Federal student loans are provided by governments, with terms like fixed-interest rates and income-driven repayment plans set by the country’s law. The U.S. Department of Education offers eligible students direct subsidized loans, determined by the university guidelines. Private loans, on the other hand, are provided by organizations like banks, credit unions, and state-affiliated organizations. Though they may be more accessible, remember that private loans may be more expensive in the long run when considering interest rates and other such terms.



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Why Students Get Into Debt

There are many factors that lead to college student debt. You might be taking out a loan in order to pay for your school’s tuition or housing, or for some extra spending money during your free time. You might be taking out a loan to pursue your education through an advanced degree. Whatever the situation, know that you are not alone in the crisis of student debt, and keep in mind ongoing costs such as tuition fees, dorms or resident housing, transportation, books and academic supplies, meals and groceries, and the extra cash you will want to save for your weekends!



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In recent years, 70% of college students graduated with loans. However, it is still commonly believed that college or university is the best path to a prosperous career, presenting a time for young students to discover their genuine interests and develop their professional skills. Whether you are about to start your academic journey or you are a parent of a college student, these facts about student loans will help you understand the global phenomenon.



1. Colleges Don’t Have to Report Debt Figures

The average amount of student debt per individual college is very difficult to predict, as many universities do not report their average debt figures. Debt figures may also be misleading as well because colleges do not always account for private loans taken out by students. Make sure you gather as much information about financial aid from your university before enrolling, and follow these tips to avoid stress:

  • Find out what the debt will be for the specific program you want to study
  • Ask about discounted interest rates for students (often this is based on academic performance)
  • Ask other students and alumni from the university
  • Apply for scholarships
  • Apply for work-study on campus or part-time work off-campus


  • Tip: If you are already working, talk to your employer about education opportunities or financial reimbursement.



2. 4 Out of 10 Adults Under Age 30 Have Student Debt

Between the ages of 18 and 29, 37% of students reported that they have outstanding student loans for their education. Only among young adults with a bachelor’s degree or higher, the share with outstanding student debt has risen to 53%. For many, it can take decades to finish paying off student debt.

  • Tip: Use all the resources you can find to apply for student loans and scholarships. With some digging, you might be able to find private individuals or organizations who award scholarships based on academic performance, socio-economic status, nationality, and even religion.



3. Higher Degrees Lead to Higher Income Families

On average, individuals ages 25 to 39 with at least a bachelor’s degree see higher family incomes compared with those who did not earn a bachelor’s degree, regardless of the debt. It is reported that about two thirds of young college graduates with student loans earn family incomes of at least $50,000. Plus, about three-in-ten young adults without a bachelor’s degree (31%) live in families earning less than $25,000, compared with only 8% of college graduates with student loans.


Despite the widely acknowledged stress that comes with student debt, what many don’t necessarily realize is that young graduates with student loans are actually more likely to live in a higher income family than those without a bachelor’s degree (and the student debt). This means that your chances of paying off your loan and living debt-free later in life are actually possible!

  • Tip: Start paying off your student loan while you are still in school. Many students wait until after graduation, but if you can start by paying a few hundred dollars each month while in school, you can make your life a lot easier!



4. Loan Delinquency is Rising

In the last quarter of 2016, loan delinquency in the US climbed to 11.2%, the highest rate reported for all types of household debt. This means that student debt is taking a backseat to other types of debt, like mortgages, rent, phone bills, and credit card bills.

  • Tip: Work on campus as part of a work-study program for students. If you do not live on a college campus, you might consider babysitting, tutoring, freelancing in a subject you are interested in, or start your own business. The profits you earn can go towards cutting down your student loan debt early.



5. Americans Owe More in Student Debt Than Credit Card Debt

With the rising costs of college tuition, the amount of debt owed by students is becoming higher than ever. And, in 2019, New Hampshire had the highest debts to pay amongst all states, with an “average amount of $39,410.”


On the other side, Utah reportedly has the lowest amount of student debt, at $18,838, with 38% of residents owing student debt.



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College students with high academic performance might be eligible for early graduation, which can save thousands on an extra semester of tuition, room, and board costs. High school students can reduce their college credit requirements as well by taking advanced placement (AP) classes early or by spending time preparing outside of school hours, like enrolling in a summer course.

  • Tip: As a student, there are plenty of ways you can reduce your own expenses as well. Leave your car at home if you can afford public transportation in order to avoid the high costs of gas and insurance. You can reduce your food expenses by cooking and utilizing campus dining services. And, you can reduce academic expenses by purchasing second-hand textbooks and reselling them at the end of each semester.



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Luckily, students today have plenty of alternatives to the traditional 4-year universities.


University of the People, for example, is reshaping how people learn. Inspiring an online education revolution, students can earn their accredited degrees tuition-free and completely online! 1 in 5 students unfortunately turn down acceptances into top schools because of the financial demands. But, by earning their degrees online, they can not only save on tuition and fees, they can also enjoy the flexibility of a personalized schedule and the ability to learn anywhere!