American borrowers collectively owe more than $1.7 billion in student loan debt, reaching an all-time high after a decade of steady growth. Rising tuition fees, rising interest rates, and an overheating economy are leaving students graduating with unprecedented amounts of debt in an uncertain economic climate.
While millennials and Generation X are responsible for most of the nation’s student loans, Generation Z is expected to quickly overtake two generations when it comes to borrowing for college education.
Here, we show how student debt has affected each generation of borrowers, and what the future cost of college education will be for future Generation Z students.
student loan debt statistics
As the latest studentaid.gov data shows, Generation X holds the largest share of federal student debt, with $525.3 billion outstanding. Millennials are a close second to her, with student loans totaling her $482.4 billion.
This may be due to age group, but Generation Z has the least outstanding federal debt. In total, people belonging to this generation owed him $104.2 billion.
Millennial Student Loan Debt
Millennials bear the majority of the national debt and are most likely to report that student loan debt is a problem for young borrowers. The following shows whether
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In June 2006, over 7.1% of millennials had a balance of $50,000 or more, compared to 7.8% of Gen Z in June 2022.
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As of June 2022, 27.7% of millennials are under $10,000 in debt.
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43.5% of millennials between the ages of 36 and 41 will have $20,000 or less in debt in 2022.
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More than 79% of millennials report that student loans are a problem for young people in the United States.
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Of those with $200,000 or more in student loans by March 2022, 31% will be under the age of 35.
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As of Q2 2022, millennials aged 35 to 49 had an average of $43,400 in federal loan balances.
Student Loan Debt Relief for Millennials
Millennials with outstanding debt, especially those with federal student loan debt, have many debt relief options. Aside from Biden’s potential forgiveness plan and the suspension of federal student loan payments (which will be extended until June 30 at the latest), there are several debt relief options available to millennials.
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General Tolerance: Current administrative forbearance is automatically granted to all federal borrowers. However, the education sector also offers a general grace period of up to 12 months in the event of financial hardship. Private lenders may also offer hardship forgiveness to those who qualify, but the details and duration will vary from lender to lender.
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Refinancing: Refinancing is using a new private loan to pay off your existing loan debt at a lower interest rate. However, refinancing eliminates all federal bailout options, so consider all other options first. If you can get a lower rate, it’s worth considering after the grace period ends.
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Repayment plan: There are multiple repayment options available to federal borrowers, including phased repayments. This will extend your repayment timeline and reduce your monthly burden. Private lenders may also offer similar plans, so check with your lender on what’s available.
Generation Z Student Loan Debt
Generation Z, born between the mid-1990s and mid-2010s, is the generation most likely to feel the financial burden of student loan debt compared to previous generations.
With the widespread need for a post-secondary degree and the rise in tertiary education, Gen Zs are more likely to be in debt and less likely to graduate compared to millennials who graduated at the same age as current students. Time balances tend to be large.
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The median Gen Z loan in June 2022 was $12,800.
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The average Gen Z will have about $15,000 in student loans by March 2022.
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By 2022, 66.7% of Gen Z had $20,000 or less in student loans.
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The largest percentage of college students under the age of 24 (28%) have access to federal direct loans between $5,000 and $9,999 as of March 31, 2022.
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7.4 million borrowers are under the age of 24.
Generation Z Student Loan Debt Relief
The benefits apply to all current borrowers, but Generation Z is set to benefit from improved relief benefits and alternative repayment options over previous generations.
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Income Repayment (IDR): An IDR plan is a federal payment plan that sets monthly payments based on income and family size. After 20 to 25 years of qualifying payments, the remaining balance is waived. Monthly payments for IDR plans are often much smaller than the original payments for standard plans.
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Pay for what you earn (PAYE): PAYE and Revised Pay As You Earn (REPAYE) are federal plans that set monthly payments at 10% of discretionary income. The balance is waived after 20 to 25 years of payments. Which one applies depends on the difficulty level. In general, PAYE is suitable for married borrowers and REPAYE is suitable for single borrowers.
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Public Service Loan Forgiveness (PSLF): The PSLF is a profession-based federal forgiveness program. Forgives the remaining federal student loan debt after an eligible civil servant has made eligible payments for her 10 years.
Generation X Student Loan Debt
Generation X may not have as many student loans as Generation Zers, but they are the generation that carries most of the country’s outstanding debt.
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As of 2021, the average Gen X student loan debt was $46,317.
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1.4 million Gen Xers between the ages of 35 and 49 have more than $500 billion in student loans.
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Over the past five years, total student loan borrowing for 35- to 49-year-olds increased by $149.5 billion.
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As of Q4 2022, 14.6 million Gen Xers have federal student loans.
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Borrowers aged 35 to 49 have the highest rate of student loan delinquencies of any generation, with a combined total of $15.5 billion.
Generation X Student Loan Debt Relief
For those stuck in an endless cycle of high-interest debt, there are payment relief methods that can help move student loan repayments forward.
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Linking: Student loan consolidation applies only to federal debt and is similar to refinancing in that it utilizes new direct loans to pay off existing federal debt. Consolidation makes it easier to manage balances and save interest. If you have private and federal loans, it may be worth refinancing if you are offered a lower interest rate after the federal grace period has passed.
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Student Loan Repayment: The Department of Education (and some private lenders) offer loan forgiveness if you meet certain program criteria. Here are some examples of situations that qualify for expulsion: becoming completely and permanently disabled, school fraud or closure, and rarely bankruptcy.
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Postponement and Toleration: General deferrals and forgiveness based on financial hardship are short-term options that help federal borrowers get back on their feet for a set number of months. A deferment allows the borrower to stop making payments without accruing interest, whereas a forgiveness requires the borrower to pay interest during the term. Private lenders may offer similar relief programs, and details vary by lender.
student debt forgiveness
President Biden’s student debt relief plan will waive up to $20,000 for eligible federal borrowers. However, the plan is currently on hold as the Supreme Court reviews lawsuits filed against it.
The program has officially been discontinued as judges prepare to hear oral statements in February, with results expected to be published in late spring or early summer. As of now, the application has been dropped, the loan has not been forgiven, and the moratorium on payments has been extended until his June 30th in lieu of the ongoing lawsuit.
Conclusion
Student debt affects each generation differently. Generation Z is expected to have the most debt, and Generation X has the largest share of outstanding debt. Millennials carry a lot of debt, but older Gen Zs (June 2022) have 13% more student loans than older millennials (June 2006). I’m here.
Considering that many Gen Zs have not started or yet graduated from college, the amount of debt owed by older Gen Zs, when compared to their predecessors, is less than what they pay for college tuition. indicates that students are most likely to feel the weight of their debt as It continues to grow.
