Words and Money: The Deal with Student Loan Debt with Natalie Bacon — Wander Wealthy (2024)

FAQs

Who holds the most student loan debt by gender? ›

Women hold 66% of all student loan debt. 41% of women undergraduates take out student loans, compared to 35% of male undergraduates. Women take an additional two years on average to pay off student loans. Black women have the highest average amount of debt.

Total federal student loan debt

Most student loans — about 92.5% — are owned by the government. Total federal student loan borrowers: 43.2 million.

"Nearly 60% of all student loan debt is held by the rich and upper-middle class," he said in a May 21, 2022 newsletter. "So, by forgiving student loan debt, we would be handing the wealthy a financial windfall while low income Americans suffer further from inflation and rising costs."

Federal Student Loans by Age

Unsurprisingly, younger people hold the majority of student loan debt. Borrowers between the ages of 25 and 34 carry about $500 billion in federal student loans—the majority of people in this age group owe between $10,000 and $40,000.

Black women's average loan balance is the highest of any group, at $11,000 (Addo and Zhang 2022). A high percentage of Black men also have student debt (32.1%). Among Hispanic borrowers who attended some college or higher in their educational career, 24.1% of women and 18.9% of men are paying off student loans.

Banks often sell student loans to another intermediary, which improves their capital ratio and allows them to make more loans. Almost all student loans are fully guaranteed by the government, so banks can sell them for a higher price because default risk is not transferred with the asset.

However , when student loans are forgiven , it means that the borrower is no longer responsible for paying back the remaining balance of their loan . Instead , it is the responsibility of the government or a specific program to cover the cost of the loan .

A repayment plan can last decades. In a nightmare scenario, it could even last into the start of your retirement. According to research, the average student loan takes 21 years to pay off.

In short, wealthy individuals can front-load large 529 deposits in such a way that the accounts can pay for several college educations decades from now and still have money left over for other family members pursuing higher education in future generations.

What ethnic group has the most debt? ›

Approximately three-quarters of Black- and White-headed families have debt, but the median debt-to-asset ratio is 50% higher among Black than White families (Copeland, 2020), with Black borrowers less likely to fully repay loans (Brevoort et al., 2021).

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom. Behind the numbers (WSJ): Due to escalating tuition and easy credit, the U.S. has 101 people who owe at least $1 million in federal student loans, according to the Education Department.

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.

1. Oral Surgeon. Even with a relatively high salary, oral surgeons typically graduate with a large student loan burden.

The average American household now owes $7,951 in credit card debt, according to the most recent data available from the Federal Reserve Bank of New York and the U.S. Census Bureau. But that's just the average.

The data analysis above shows that among surveyed Black or African American people who have attended some college or higher, a disproportionately higher share have student loan debt than other racial groups. The share of student loan debt is also higher for women than men across nearly all racial groups.

Women hold almost 2/3 of the country's $1.54-trillion student debt: $929 billion. Women earning a bachelor's degree graduate owing an average of $2,700 more than their male peers. Student debt is the second-highest source of household debt after housing.

Report: Debt Impacts Minority Groups Most

While 43 percent of all borrowers reported struggling to repay student loans, women and Black and Hispanic individuals expressed more hardship.

By 2030, Millennials (born between 1981 to 1996) are expected to have the most total debt at an average of $228,891 per person. Generation X (born between 1965 and 1980) holds the most student debt at an average of $45,796, while Gen Z (born between 1997 and 2012) has the lowest with $20,468.