What makes student loans so difficult to pay off?
Key Points. Interest can make student loans more expensive, while inflation can make that debt harder to manage alongside other bills. Paying off some of your debt during your studies could ease the burden later on and save you money on interest.
Student loan debt can feel overwhelming and take decades to pay off. The standard federal student loan repayment term is 10 years, but the average student borrower takes 20 years to fully repay their debt.
Factors Affecting the Time to Pay Off Student Debt
Many factors can play a role in how long it takes to get out of student loan debt, including the length of your repayment plan, your loan amount, interest rates, and your income.
Higher education financing allows many Americans from lower- and middle-income backgrounds to invest in education. However, over the past 30 years, college tuition prices have increased faster than median incomes, leaving many Americans with large amounts of student debt that they struggle or are unable to, pay off.
More debt and less support have undeniably led to long-term debt burden and severe financial consequences. Although more students of color are attending college and pursuing the “American Dream,” student debt has delayed them from purchasing homes, starting businesses, and building generational wealth.
Total Student Loan Debt | Repayment Period |
---|---|
Less than $7,500 | 10 years |
$7,500-10,000 | 12 years |
$10,000-$20,000 | 15 years |
$20,000-$40,000 | 20 years |
Plan out your repayment
Let's assume you owe $30,000, and your blended average interest rate is 6%. If you pay $333 a month, you'll be done in 10 years. But you can do better than that. According to our student loan calculator, you'd need to pay $913 per month to put those loans out of your life in three years.
What is the monthly payment on a $70,000 student loan? The monthly payment on a $70,000 student loan ranges from $742 to $6,285, depending on the APR and how long the loan lasts. For example, if you take out a $70,000 student loan and pay it back in 10 years at an APR of 5%, your monthly payment will be $742.
Research from EducationData.org shows that almost 45.3 million Americans hold an average federal student loan debt balance of $37,338. Combined, student loan debt in the U.S. adds up to nearly $2 trillion. According to the same data, the average student loan monthly payment is $503.
Is $100,000 in student debt a lot?
If you have six figures of student loan debt, you know how daunting repayment can seem. Student loan debt in excess of $100K can cause you to pay thousands in interest charges, and your monthly payments can take up a substantial amount of your cash flow.
- OB-GYN: $241,600.
- Anesthesiologist: $241,600.
- Physician: $205,037.
- Pharmacist: $170,444.
- Physical therapist: $116,183.
- Physician assistant: $112,500.
- Registered nurse: $47,321.
- Occupational therapist: Unavailable.
Student loan cancellation doesn't stimulate the economy
According to The Committee For A Responsible Federal Budget, cancelling all student loan debt would produce only $90 billion in available cash to spend in 2021 and only $450 billion over the next 5 years.
For decades, there had been enthusiastic bipartisan agreement that states should fund high-quality public colleges so that their youth could receive higher education for free or nearly so. As a result of this ideological swing, student loan debt began to mount.
Our system of robust public investments that helped previous generations succeed was replaced with a student loan trap designed to imprison students with unexpectedly high interest rates, unfair penalties, and debt collection practices designed to benefit private corporations like Navient and Sallie Mae.
While some loans may start out at a reasonable interest rate, predatory lenders don't abide by the same rules as federal loans, which never increase. Some lenders may double or triple the interest rate over the lifespan of the loan, making it nearly impossible to pay off.
If those monthly payments look low compared to what most borrowers pay, it's because most borrowers carry a lot more than $20,000 in student loan debt. As of March 2023, the average federal student loan debt in the United States was about $37,720, according to a BestColleges analysis of Education Department data.
Balance | Repayment Term | Monthly Payment |
---|---|---|
$80,000 | 5 years | $1,546.62 |
$80,000 | 10 years | $888.16 |
$80,000 | 15 years | $675.09 |
$80,000 | 20 years | $573.14 |
- Refinance student loans.
- Apply for federal forgiveness programs.
- Consider income-driven repayment (IDR)
- Make extra payments when you can.
- Explore loan repayment programs.
- Apply the debt avalanche method.
- Get help from your employer.
- Use 529 college savings funds.
Key Takeaways. Carrying student debt can affect your ability to buy a home if your debt-to-income ratio is too high. If you have too much student loan debt, you won't be able to save as much for retirement. Student loan debt can lower your credit score, especially if you fail to make on-time payments.
How long does the average person spend paying off student loans?
The average student borrower takes 20 years to pay off their student loan debt. Some professional graduates take over 45 years to repay student loans. 21% of borrowers see their total student loan debt balance increase in the first 5 years of their loan.
Student loans are considered good debt due to their potential for long-term benefits, including increased earning potential. Other factors of good debt include lower interest rates, flexible repayment options, and potential tax deductions.
Student loan payments vary depending on the loan amount, interest rate and repayment period. The average student loan payment is between $200 and $299, according to the most recent available data from the Federal Reserve.
Having a student loan will affect your credit score. Your student loan amount and payment history are a part of your credit report. Your credit reports—which impact your credit score—will contain information about your student loans, including: Amount that you owe on your loans.
A loan goes into default after a borrower fails to make a payment for at least 270 days, or about nine months, which can result in further financial consequences. A default can further damage your credit score, making it harder to buy a car or house. It could take years to establish good credit again.
References
- https://studentaid.gov/manage-loans/repayment/plans/standard
- https://www.bankrate.com/loans/student-loans/current-interest-rates/
- https://www.tateesq.com/learn/when-do-student-loans-go-away
- https://www.whitehouse.gov/briefing-room/statements-releases/2024/04/08/president-joe-biden-outlines-new-plans-to-deliver-student-debt-relief-to-over-30-million-americans-under-the-biden-harris-administration/
- https://www.foxbusiness.com/personal-finance/how-pay-off-large-student-loans
- https://www.ramseysolutions.com/debt/what-happens-if-you-dont-pay-student-loans
- https://wallethub.com/answers/sl/monthly-payment-on-150000-student-loan-1000451-2140765203/
- https://www.investopedia.com/student-loan-debt-too-much-8576649
- https://www.fool.com/research/student-loan-debt-statistics/
- https://www.sofi.com/learn/content/financial-aid-vs-student-loans/
- https://www.bankrate.com/loans/student-loans/repay-college-loans-fast/
- https://www.bankrate.com/loans/student-loans/student-loans-for-living-expenses/
- https://www.nerdwallet.com/article/loans/student-loans/pay-off-100000-student-loans
- https://wallethub.com/answers/sl/monthly-payment-on-100000-student-loan-1000451-2140765188/
- https://www.consumerfinance.gov/paying-for-college/student-loan-forgiveness/
- https://www.tateesq.com/learn/what-happens-never-pay-student-loans
- https://www.foxbusiness.com/fox-money/student-loan-refinance/100k-in-student-loans
- https://www.forbes.com/advisor/student-loans/how-much-is-too-much-student-debt/
- https://www.onlinecolleges.net/student-debt-in-the-u-s-part-2-a-brief-history-of-student-debt-in-the-united-states/
- https://educationdata.org/student-loan-debt-statistics
- https://finance.yahoo.com/news/why-m-not-paying-student-231400470.html
- https://www.affordablecollegesonline.org/college-resource-center/unfair-college-loan-practices/
- https://www.nerdwallet.com/article/loans/student-loans/how-can-i-get-rid-of-student-loans-without-paying
- https://www.beckersasc.com/asc-news/the-14-medical-careers-with-the-highest-student-loan-debt.html
- https://www.sofi.com/learn/content/grades-and-financial-aid/
- https://dfpi.ca.gov/2023/02/13/student-loan-debt-a-disproportionate-burden-on-black-and-latino-borrowers/
- https://www.nerdwallet.com/article/loans/student-loans/pay-off-student-loans-fast
- https://www.credible.com/refinance-student-loans/average-student-debt
- https://www.sofi.com/learn/content/student-loan-interest-rates-guide/
- https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized
- https://www.investopedia.com/articles/personal-finance/100515/10-ways-student-debt-can-destroy-your-life.asp
- https://money.com/consequences-not-paying-student-loans/
- https://www.lendingtree.com/student/why-did-my-student-loan-payment-go-up/
- https://www.investopedia.com/articles/personal-finance/022416/worst-things-can-happen-if-you-dont-pay-your-student-loans.asp
- https://www.conahec.org/news/case-against-student-loan-cancellation
- https://taxprof.typepad.com/taxprof_blog/2018/05/wsj-usc-alum-is-one-of-101-grads-with-1-million-in-student-loans.html
- https://www.experian.com/blogs/ask-experian/pros-and-cons-of-student-loans/
- https://www.consumerfinance.gov/ask-cfpb/what-happens-if-i-default-on-a-federal-student-loan-en-663/
- https://www.workrisenetwork.org/working-knowledge/impact-student-debt-low-wage-workforce
- https://www.bestcolleges.com/news/analysis/what-caused-the-student-debt-crisis/
- https://wallethub.com/student-loan-calculator
- https://studentaid.gov/manage-loans/repayment/repaying-101
- https://www.investopedia.com/student-loans-good-debt-8559798
- https://www.savingforcollege.com/article/how-long-does-it-take-to-repay-a-student-loan
- https://www.1edcu.org/pros-and-cons-of-student-loans/
- https://www.lendingtree.com/student/pay-off-200k-student-loans/
- https://wallethub.com/answers/cc/how-to-pay-off-30000-in-credit-card-debt-1000294-2140754720/
- https://studentaid.gov/articles/pay-off-student-loans-faster/
- https://www.gao.gov/blog/student-loan-payment-pause-ends-income-driven-repayment-plans-may-help-borrowers
- https://www.bankrate.com/loans/student-loans/pay-more-than-minimum-payment/
- https://www.credible.com/refinance-student-loans/i-have-100k-in-loans-student-loan-consolidation
- https://www.credible.com/blog/refinance-student-loans/how-to-pay-off-large-student-loans/
- https://www.forbes.com/advisor/student-loans/100k-student-loan-monthly-payment/
- https://www.nerdwallet.com/article/loans/student-loans/who-owns-my-student-loans
- https://www.tateesq.com/learn/can-inheritance-garnished-student-loans
- https://www.usnews.com/education/best-colleges/paying-for-college/slideshows/10-advantages-of-federal-student-loans
- https://money.usnews.com/loans/student-loans/articles/average-student-loan-payment
- https://reason.com/2024/02/06/the-real-student-loan-crisis/
- https://www.lendingtree.com/student/student-loan-debt-statistics/
- https://www.freedomtoprosper.org/wp-content/uploads/2018/05/FTP-One-Pager-Final.pdf
- https://www.credible.com/refinance-student-loans/pay-off-300k
- https://www.cnn.com/cnn-underscored/money/average-student-loan-debt
- https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service
- https://www.aplu.org/our-work/4-policy-and-advocacy/publicuvalues/student-debt/
- https://protectborrowers.org/incarceration/
- https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt
- https://www.consumerfinance.gov/ask-cfpb/do-student-loans-affect-my-credit-score-en-581/
- https://www.whitehouse.gov/cea/written-materials/2024/04/08/the-economics-of-administration-action-on-student-debt/
- https://www.savingforcollege.com/article/how-much-student-loan-debt-is-too-much
- https://educationdata.org/average-time-to-repay-student-loans
- https://files.eric.ed.gov/fulltext/ED610484.pdf
- https://www.tateesq.com/learn/defaulted-student-loans-not-on-credit-report
- https://www.bestcolleges.com/research/average-student-loan-payment/
- https://wallethub.com/answers/cc/how-long-to-pay-off-30000-credit-card-debt-1000423-2140858502/
- https://www.lendingtree.com/student/how-to-pay-off-30k-student-loans/
- https://educationdata.org/average-student-loan-debt
- https://www.credible.com/refinance-student-loans/pay-off-200k
- https://www.isac.org/students/after-college/documents/Default_FAQs_College.pdf
- https://en.wikipedia.org/wiki/Sallie_Mae
- https://www.savingforcollege.com/article/how-to-pay-for-college-without-student-loan-debt
- https://www.lendingtree.com/student/how-much-student-debt-too-much/
- https://www.collegedata.com/resources/pay-your-way/3-types-of-college-loans
- https://www.cfr.org/backgrounder/us-student-loan-debt-trends-economic-impact
- https://www.bankrate.com/loans/student-loans/never-pay-student-loans/
- https://www.wusa9.com/article/news/verify/verify-how-many-people-federal-student-loan-debt/65-ec14eb40-1aa2-46b9-98d7-d30e8bb4a690
- https://thebestschools.org/resources/college-finances/about-student-loans/
- https://cole.house.gov/media-center/weekly-columns/the-cost-of-canceling-student-debt
- https://www.forbes.com/advisor/education/student-resources/is-work-study-worth-it/
- https://www.uc.edu/news/articles/2023/03/how-student-loan-forgiveness-could-affect-the-economy.html
- https://www.ed.gov/news/press-releases/biden-harris-administration-approves-12-billion-loan-forgiveness-over-150000-save-plan-borrowers
- https://www.sofi.com/learn/content/tips-to-pay-off-mortgage-in-5-years/
- https://www.nbclosangeles.com/news/california-news/student-loan-debt-california/2970933/
- https://www.fool.com/student-loans/2023/09/02/2-reasons-student-loans-are-so-difficult-to-pay-of/
- https://www.investopedia.com/how-long-pay-off-student-loan-debt-8549844
- https://www.bestcolleges.com/research/how-many-people-have-student-loans/
- https://www.forbes.com/advisor/student-loans/pay-off-80k/
- https://www.axios.com/2023/06/30/student-debt-age-gender
- https://www.lendingtree.com/student/student-loans-good-bad-debt/
- https://www.appily.com/guidance/articles/paying-for-college/pros-and-cons-of-private-student-loans
- https://www.bankrate.com/loans/student-loans/debt-settlement-on-student-loan-debt/
- https://finance.yahoo.com/news/monthly-payment-20-000-student-112728748.html
- https://studentaid.gov/announcements-events/default-fresh-start
- https://smartasset.com/student-loans/average-student-loan-interest-rate
- https://www.investopedia.com/student-debt-affect-economy-8550501
- https://www.ed.gov/news/press-releases/biden-harris-administration-announces-additional-74-billion-approved-student-debt-relief-277000-borrowers
- https://www.cnn.com/2023/09/24/politics/what-happens-dont-pay-student-loans/index.html
- https://www.usa.gov/student-loan-problems
- https://www.bestcolleges.com/research/how-long-to-pay-off-student-loans/