How Student Loan Debt Has Grown Over Time

(STACKER) – Some of the most common types of debt – a mortgage, car loan and credit card balance – are often necessary forms of debt that people incur in everyday life, whether it’s acts to cover household purchases and build good credit to achieve the American Dream of homeownership.

In the United States, pursuing higher education has also often meant adding another kind of debt burden. Since the Great Recession, rising tuition fees at American universities have contributed to the growth of student loans at unprecedented rates along with other forms of personal debt. In June 2022, the average consumer student debt in the United States was $39,381, according to Experian. In 2012, aggregate US consumer student loan debt topped the $1 trillion mark for the first time, and it has continued to climb ever since.

To better understand how student loan debt has increased over time, Experian compiled data collected from student loan holders across the country and government data dating back to 2009. The average loan balance used in the analysis represents the average debt of all student borrowers.

Historical data shows how average student loan balances have grown faster than inflation. In fact, student debt has also increased to more than credit card and auto loan balances combined.


Student loan debt is the largest form of debt after mortgages

In the second quarter of 2021, the average student loan debt balance increased by nearly 92% since 2009, according to data from Experian. Average student loan debt saw the biggest year-over-year increase from summer 2012 to summer 2013, when they jumped nearly 10%. For Americans with student loan debt, it averages nearly $40,000, second only to residential mortgages in terms of the average consumer debt balance.

Average student debt versus inflation.

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Student loan debt growth outpaces inflation

According to the United States Bureau of Labor Statistics (BLS), the annual national inflation rate in the United States hovered around 2% – and often fell below 2% – during the decade before the COVID-19 pandemic. In 2021, the first full calendar year of the pandemic era, the inflation rate soared to 7%.

Since the summer of 2012, the average student loan balance has grown much faster. Over the three-year period leading up to 2012, the average student loan balance increased by just under $2,000. Since 2012, student debt has grown steadily at a much faster rate than income.

Average student debt relative to median household income.

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Student loan debt exceeds income

Median household income in the United States fell in the years following the 2008 financial crisis, then saw modest year-over-year growth from 2015 to 2020, according to the US Census Bureau.

By comparison, the average student debt balance has grown at more than double the rate of median household income since 2009. take inflation into account. Between 2009 and June 2022, the average student loan balance held by US consumers increased by approximately 92%, from $20,560 to $39,381.

Average college price versus median household income.


Rising tuition fees add to financial pressure

For at least a decade, college tuition has become increasingly expensive, according to data from the BLS and the US Department of Education.

The rate of increase in the average student debt balance in the United States actually slowed from 2020 to 2021, according to data from Experian. This is largely due to a nationwide decline in college enrollment during the COVID-19 pandemic, which reduced the number of people taking out new loans.

The CARES Act, passed in March 2020, also affected loan balances when it set an emergency interest rate for federal student loans at 0%. The law also allows employers to make up to $5,250 in tax-free annual payments on their employees’ student loans, which could have had an effect.

On August 24, 2022, the Biden administration announced a student debt relief plan to forgive $10,000 in student debt for people earning less than $125,000 a year, or $250,000 for married couples. Pell Grant recipients will receive $20,000 in loan forgiveness. For all borrowers, the pause on federal loan repayments has been extended for over two years now, with a final deadline set for December 31, 2022. This story originally appeared on Experian and was produced and distributed in partnership with StackerStudio.

This article has been republished under a CC BY-NC 4.0 license.