2026 Student Loan Statistics: Effects of Student Debt on the Job Market

Research Summary: In today’s competitive job market, a Bachelor’s Degree is increasingly seen as essential for success. However, the rising costs of higher education have led to a significant reliance on student loans, contributing to a staggering national debt and impacting both individuals and the economy.

To grasp the profound effects of student debt on Americans and the broader U.S. economy, we’ve compiled the following insights:

• As of 2023, total student loan debt in the U.S. has soared to $1.75 trillion.

• Currently, there are 45 million federal student loan borrowers across the nation.

• The average student loan debt per borrower is approximately $32,731.

• Monthly student loan payments average around $393.

• On average, borrowers take 20 years to repay their student loans.

For a more detailed analysis, we have categorized the data as follows:
Key Findings | Total | Average | State | Demographics | Hardships And Repayment | Impact On Career And Life Choices

Key Findings

• 92% of student loans are federally funded.

• According to the Urban Institute, 48% of student debt is held by households with graduate or professional degrees.

• Dental school graduates hold the highest average debt at $292,169, followed by medical school graduates at $201,490.

• Average state student loan debts range from $29,200 in North Dakota to $55,400 in Washington, D.C.

• Only 35% of the U.S. population has attained a college degree.

• Individuals aged 35 to 49 carry the highest average student loan debt at $42,373.23 per borrower.

• Approximately 8 million borrowers over 50 still owe significant amounts in student loans as they approach retirement.

• Black borrowers owe, on average, 71.5% more than their white counterparts ($32,047 vs $18,685).

• 20% of student loan borrowers default, with college dropouts accounting for 63% of these defaults.

• First-generation college students are 2.7 times more likely to default compared to their peers whose parents have higher education.

• 54% of respondents feel their career progression has been hindered by student loans.

• Over one-third of student loan holders have taken on multiple jobs or increased their working hours due to their debts.

• Half of workers with student debt have postponed or opted against further education because of their financial burdens.

Total Student Loan Debt

Total federal student loan borrowers: 45 million

Total outstanding federal student loan debt: $1.75 trillion

According to a recent report, 92% of student loans are issued by the federal government, highlighting the significant role of private lenders, who account for the remaining 8%. Private loans often come with higher interest rates and lack eligibility for income-driven repayment or federal loan forgiveness programs.

Average Student Loan Debt

As of 2023, 54% of the graduating class of 2022 had student debt, with the average loan amount at $29,100.

For those pursuing further education, debt levels increase significantly. The Urban Institute notes that 48% of student debt is held by households with graduate or professional degrees.

• Average Medical School Debt: $201,490

• Average Dental School Debt: $292,169

• Average Pharmacy School Debt: $179,514

• Average Veterinary School Debt: $149,877

• Average Graduate School Debt: $82,800

• Average Law School Debt: $145,500

For a detailed breakdown of student loan debt by state, see below.

Student Loan Debt By State

Student loan burdens vary significantly across states, with some regions facing larger debts than others.

In particular, Washington, D.C. students have the highest average student loan debt at $55,400, while North Dakota students have the lowest at $29,200.

Student Loan Debt By State

Student Loan Demographics: Loans By Age, Race, And Income

Student loans do not affect all demographics uniformly. While student debt has escalated over the past two decades, only 35% of the U.S. population holds a college degree.

Student Loans By Age

Individuals aged 35 to 49 carry the most substantial amount of student loan debt, totaling $601 billion across 14 million borrowers, averaging $42,373.23 per borrower. In contrast, those aged 25 to 34 have a similar number of borrowers but lower average debt, indicating they may still be accumulating loans.

Student Loan Debt By Families’ Household Income

Generally, students from lower-income families are more likely to incur student loan debt. In contrast, those from higher-income backgrounds are more likely to graduate without debt, thus having greater freedom to explore job opportunities.

However, a majority of students from all income levels still graduate with debt.

Student Debt By Household Income

Interestingly, while students from higher-income families are less likely to incur loans, those who do tend to have higher debt levels, as these families often invest more in education, which may necessitate borrowing.

Student Loans By Race

Black borrowers face significantly higher student loan balances compared to their white or Hispanic counterparts. The data reflects averages among borrowers aged 25 to 55 who took loans for their own education, with Black borrowers averaging $32,047 and white borrowers averaging $18,685.

Student Loan Hardships And Repayment

As of 2023, 54% of graduates from the class of 2022 still carried student loan debt.

The average amount of student debt is nearly $30,000, comparable to the cost of a significant investment such as a home or a new vehicle. Consequently, many graduates struggle to meet their repayment obligations.

The U.S. Department of Education reports that around 20% of borrowers default, having missed at least 270 days of payments, with over a million loans entering default annually.

Who is most at risk of defaulting on student loans?

• College dropouts account for 63% of student loan defaults.

• First-generation college students are 2.7 times more likely to default compared to peers whose parents have higher education.

See: How much in student loans can I afford?

Student Loans Impact On Career And Life Choices

Beyond individual financial hardship, student loans influence the job market and delay important life milestones. Many borrowers feel compelled to work multiple jobs or accept positions unrelated to their field of study to manage their debt.

To explore how student loans affect career choices, we surveyed 500 workers with student debt. A summary of our findings is detailed below:

Quick Facts

• 54% of respondents believe student loans have impeded their career advancement.

• Over one-third of student loan holders have taken on multiple jobs or increased their working hours due to their debts.

• 25% have sought work outside their chosen field due to financial obligations.

• 1-in-2 workers with student loans have postponed or opted against further education because of their debts.

Student Loans Influence Career Choices

The chart above illustrates responses to the question, “How have student loans impacted your career choices? (Choose all that apply).” Nearly 38% of respondents reported having worked multiple jobs to manage their student loans, while 34% have increased their working hours, and 25% have accepted jobs outside their degree field.

It’s clear that student debt restricts career options for many borrowers.

Furthermore, student loans affect other critical life events. The following highlights the percentage of respondents who have faced delays in achieving various milestones due to student debt.

Impact Of Student Debt On Further Education

Taking on additional debt while struggling to manage existing loans is understandably daunting. According to our survey, half of the respondents with student debt have delayed or decided against pursuing further education due to financial constraints.

In certain fields, higher education may be essential for career advancement or increased salaries. While some respondents may be making informed decisions about their debt, others may simply lack the financial means to invest in their future education.

Impact Of Student Debt On Homeownership

Homeownership, often seen as part of the American dream, comes with challenges. High monthly loan payments hinder saving for a down payment and can complicate obtaining a mortgage.

Overall, homeownership remains a delayed milestone for many due to student loan burdens, particularly among those with debts exceeding $100,000.

Impact Of Student Debt On Marriage

10% of survey respondents reported delaying marriage because of student debt, with those carrying over $100,000 in loans most likely to postpone their wedding plans.

Marriage also introduces tax implications for student loan interest deductions, potentially further complicating financial decisions for couples.

Impact Of Student Debt On Parenthood

The birth rate in America has declined, and while student loans are not solely to blame, a significant number of respondents acknowledge that their debt has delayed their plans for parenthood.

Impact Of Student Debt On Saving For Retirement

Student loans also affect individuals’ ability to save for retirement, further complicating their financial futures.

In addition to the issues mentioned, respondents highlighted several other common challenges related to student debt:

Other Common Effects

• Difficulty affording necessities (housing, healthcare, etc.)

• Increased stress, anxiety, and negative mental health effects

• Decreased credit scores

• Inability to save for children’s future college expenses

Student Loans FAQ

1. Do the rich take out student loans?

   Yes, the wealthy do take out student loans. In fact, nearly one-third of student loan debt is held by the wealthiest 20% of households, while only 8% is owed by the bottom 20% of households.

   However, this does not imply that wealthier individuals are more burdened. Households in the top 20% of earners generally have the means to manage student loan payments, while lower-income individuals often face significant consequences, including the need to work extra hours or take jobs unrelated to their degree.

2. What percentage of Americans have student loans?

   As of 2023, 12.9% of Americans carry student loan debt. This translates to nearly 13% of the U.S. population holding a staggering $1.75 trillion in collective debt. Despite 12.9% corresponding to about 45 million individuals, the total volume of debt remains overwhelming.

3. Which generation has the most debt?

   Generation X holds the most student loan debt in the U.S., averaging $140,643. For comparison, here are the average debts of other generations:

   • Gen Z: $16,043

   • Millennials: $87,448

   • Baby Boomers: $97,290

Student Loans Can Open Doors, But Close Some

Ultimately, student loans are often necessary for many to obtain a higher education and pursue their desired careers. The job market typically favors those with college degrees, providing more opportunities.

However, excessive student debt can limit career options, forcing job seekers to accept positions out of necessity rather than preference, and hindering their ability to negotiate salaries effectively.

Moreover, the ramifications of student loans extend beyond professional choices to affect various life milestones. As one survey participant expressed, “I might never become a parent because of my student loans. I also cannot afford to buy a house. I feel trapped in an unsatisfactory marriage due to my financial situation.”

Sources

Pew Research Center
Georgetown University
Association of American Medical Colleges
American Dental Education Association
American Association of Colleges of Pharmacy
American Veterinary Medical Association
National Center for Education Statistics
Studentaid.gov
Urban Institute

Author

Kathy Morris

Kathy is the head of content at Zippia with a knack for engaging audiences. Prior to joining Zippia, Kathy worked at Gateway Blend growing audiences across diverse brands. She graduated from Troy University with a degree in Social Science Education.