2021 Student Loan Statistics: Impact Of Student Debt On Job Market

By Kathy Morris - Feb. 3, 2021

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Quick Student Debt Facts

  • Total student loan debt: $1.6 trillion
  • Total federal student loan borrowers: 45 million
  • Average student loan debt: $28,950
  • Average student loan payment: $393
  • Average repayment time: 20 years

Those with a college degree have higher lifetime earnings. Beyond that many careers, both financially and personally rewarding, require a college degree.

Yet, due to rising college costs, many students find it necessary to finance higher education with student loans. Unfortunately, some borrowers find it difficult to pay back their hefty debt upon graduation.

Currently in the US, 45 million borrowers owe $1.6 trillion in student loans with a total average debt of $28,950. What does this mean for the job market?

To better understand the full impact and scope of student loans, particularly on young earners and their careers, Zippia created this report.

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Key Findings

  • 92% of student loans are through the federal government.
  • 62% of the class of 2019 graduated with student debt.
  • According to the Urban Institute, 48% of student debt is held by households with graduate or other professional degrees.
  • Dental school graduates have an average debt of 292,169, making them the most debt laden professional degree, followed by medical school at $201,490.
  • Average state student loan debts range from $29,200 in North Dakota to $55,400 in DC.
  • Only 35% of the population has a college degree.
  • 35 to 49 year olds owe the biggest amount of student loans in sheer volume at 601 billion spread across 14 million borrowers.
  • 35-to-49 year olds also have the highest average student loans at $42,373.23 per borrower.
  • 8 million borrowers over 50 still owe significant student loan debt even as they near or exceed retirement age.
  • Students coming from families with less income are more likely to carry student loan debt.
  • A majority of students from all households of all income graduate with student debt.
  • When students from higher income households do graduate with debt, they graduate with more than counterparts from lower income households.
  • Black borrowers are disproportionately burdened by student loans- Owing on average $32,047 compared to only $18,685 for white borrowers.
  • 20% of student loan borrowers are in default.
  • College-drops out are responsible for 63% of student loan defaults.
  • First-generation college students are 2.7 times more likely to default on college debt than students whose parents have achieved higher education.
  • 54% of respondents feel their career has been hindered by student loans.
  • Over one third of student loan holders have held multiple jobs or worked additional hours due to student loans.
  • 25% work outside of their chosen field due to debt obligations.
  • 1-in-2 workers with student debt have delayed or decided against further education due to student debt.
  • Those with student loans over $100,000 were most likely to say student loans had delayed homeownership.

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Total Student Loan Debt

Total federal student loan borrowers: 45 million

Total outstanding federal student loan debt: $1.6 trillion

92% of student loans, according to a June 2020 report by MeasureOne, are through the federal government. Unfortunately, this means 8% of loans are through private lenders. Private lenders often have higher interest and these loans are not eligible for income-based repayment or federal loan forgiveness.

Average Student Loan Debt

Sixty-two percent of the class of 2019 graduated with student debt, according to the most recent data available from The Institute for College Access Success. Among these graduates, the average student loan debt was $28,950.

Students who pursue post-college education can expect to rack up even more debt. According to the Urban Institute, 48% of student debt is held by households with graduate or other 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

You can see a more in-depth breakdown of student loan debt by state below.

Student Loan Debt By State

Student loans are not evenly distributed across the country. Students in some states are burdened with more student loans than others.

In particular, DC students have higher loans than the rest of the country, with an average $55,400 in student loan debt. North Dakota residents have the least amount of student loans on at “only” $29,200.

Student Loan Debt By State

State Average Borrower Debt Total Student Debt
Alabama $37,100 $22.2 Billion
Alaska $33,600 $2.2 Billion
Arizona $34,100 $29.5 Billion
Arkansas $33,300 $12.3 Billion
California $36,400 $138 Billion
Colorado $35,800 $27.2 Billion
Connecticut $34,900 $16.3 Billion
Delaware $37,000 $4.4 Billion
District of Columbia $55,400 $6.4 Billion
Florida $39,700 $94.3 Billion
Georgia $41,500 $64.6 Billion
Hawaii $36,500 $4.3 Billion
Idaho $32,600 $6.8 Billion
Illinois $37,600 $59 Billion
Indiana $32,800 $28.7 Billion
Iowa $30,500 $12.8 Billion
Kansas $32,500 $12 Billion
Kentucky $32,500 $18.7 Billion
Louisiana $34,400 $21.1 Billion
Maine $32,500 $5.8 Billion
Maryland $42,700 $34.2 Billion
Massachusetts $34,100 $29.2 Billion
Michigan $35,900 $49.3 Billion
Minnesota $33,400 $25.5 Billion
Mississippi $36,700 $15.4 Billion
Missouri $35,400 $28.4 Billion
Montana $33,300 $4 Billion
Nebraska $32,100 $7.6 Billion
Nevada $33,600 $11 Billion
New Hampshire $36,700 $6.1 Billion
New Jersey $35,100 $39.8 Billion
New Mexico $33,600 $7.4 Billion
New York $37,800 $89.2 Billion
North Carolina $37,500 $45.9 Billion
North Dakota $29,200 $2.4 Billion
Ohio $34,600 $14.6 Billion
Oklahoma $31,500 $19.5 Billion
Oregon $36,900 $61.5 Billion
Pennsylvania $35,400 $4.3 Billion
Rhode Island $31,800 $26.3 Billion
South Carolina $38,300 $3.4 Billion
South Dakota $31,100 $29.6 Billion
Tennessee $36,200 $111.3 Billion
Texas $32,800 $9.4 Billion
Utah $32,200 $2.7 Billion
Vermont $36,700 $40.3 Billion
Virginia $39,000 $26.7 Billion
Washington $35,000 $6.9 Billion
West Virginia $31,800 $22.3 Billion
Wisconsin $31,800 $1.6 Billion
Wyoming $31,000 $1.6 Billion

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Average Student Loan Payment

The average student loan borrower pays $393 per month, according to the Federal Reserve.

It takes student borrowers an average of 20 years, or 240 monthly payments, to repay their student loan debt.

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

Student loans are not uniformly experienced by the population. Not only have student loans increased over the past two decades, but only 35% of the population has achieved a college degree.

Student Loans By Age

Age Average Student Loans Loans Owed (In Billions) Borrowers (In Millions)
24 and younger $14,807.69 $115.50 7
25 to 34 $33,817.56 $500.50 14
35 to 49 $42,373.23 $601.70 14
50 to 61 $42,290.32 $262.20 6
62 and older $37,739.13 $86.80 2

35 to 49 year olds owe the biggest amount of student loans in sheer volume at 601 billion spread across 14 million borrowers. This averages out to about $42,373.23 in loans per borrower. 25 to 34 year olds have a similar number of borrowers, but less average debt. Perhaps they (and the those under 24) are still accumulating student loan debt.

8 million borrowers over 50 still owe significant student loan debt.

Student Loan Debt By Families’ Household Income

Income Level Percent With No Student Loan Debt
Less than $35,000 per year 25%
$35,000 to $69,999 per year 26%
$70,000 to $119,999 30%
$120,000 or more 41%

In general, students coming from families with less income are more likely to carry student loan debt. Those who come from more advantaged backgrounds have higher chances of entering the workforce unburdened by student debt and more open to available to explore opportunities.

However, a majority of students from all households still carry debt upon graduation.

Student Debt By Household Income

Income Level Average Student Debt Balance
Less than $27,000 per year $26,000
$27,001 to $52,000 per year $34,200
$52,001 to $97,000 per year $34,700
$97,001 to $173,000 per year $41,200
$173,001 or more per year $46,700

Interestingly, while students from higher earning families are less likely to have loans, those that do carry more debt. Higher income households spend more on education- even when that means student loans.

Student Loans By Race

Race Average Student Loan Balance
Black $32,047
White $18,685
Hispanic $15,583
Other $12,935

Black student loan borrowers have significantly higher balances than white or Hispanic borrowers. The above chart is a breakdown of average student loan debt breaks down by race for student loan borrowers between 25 and 55 who took out loans for themselves. Black borrowers owe an average $32,047 compared to only $18,685 for white borrowers.

class="">Student Loan Hardships And Repayment

62% of seniors graduating in 2019 had student loan debt.

With an average student loan amount just under $30,000, that is the equivalent of a healthy nonpayment on a home, a brand new Audi, and a year of median individual income in many small, rural towns. Unsurprisingly, not all students are able to pay back their debts.

The U.S. Department of Education reports about 20 percent of borrowers are in default, having gone at least 270 days without a payment. More than one million loans go into default each year.

Who is most likely to default on student loans?

  • College-drops out are responsible for 63% of student loan defaults.
  • First-generation college students are 2.7 times more likely to default on college debt than students whose parents have achieved higher education.

See: How much in student loans can I afford?

class="">Student Loans Impact On Career And Life Choices

In addition to causing personal financial hardships, student loans impact the job market and cause holders to delay traditional life milestones.

From working multiple jobs to working less than desirable jobs unrelated to their degree, many job seekers feel the pressure to pay off their mountain of student debt.

To better understand how student loans are influencing career choices, we surveyed 500 workers with student debt. You can read a more in depth breakdown of our findings and methodology below:

Quick Facts

  • 54% of respondents feel their career has been hindered by student loans.
  • Over one third of student loan holders have held multiple jobs or worked additional hours due to student loans.
  • 25% work outside of their chosen field due to debt obligations.
  • 1-in-2 workers with student debt have delayed or decided against further education due to student debt.

Student Loans Influence Career Choices

Above you can see respondents answers to the question, “How have student loans ever impacted your career choices? (Choose all that apply).”

Nearly 38% have at some point in their career worked multiple jobs to help chip away at their student loans. Similarly, 34% have worked more hours due to their debt. We did not differentiate whether that was more hours for additional money or more hours at salaried positions due to financial pressure to keep a job.

Perhaps most disappointing for student loan holders, 25% work outside the field they went into debt to enter. Others feel obligated to stay at “bad” jobs to pay the bills or accept the first job available.

Ultimately, it is easy to see that no small number of workers with student loans find their choices limited by debt.

However, careers are not the only important life event impacted. Many struggle to accomplish other life milestones due to the financial burden of their student debt. Below we highlight the percent of respondents by debt level and their responses to a series of questions.

Impact Of Student Debt On Further Education

Signing up for more debt when you struggle to pay your current debt is unsurprisingly a strong deterrent. According to our survey, 1-in-2 workers with student debt have delayed or decided against further education due to student debt.

However, in some fields higher education is necessary to advance or obtain higher salaries. While students may be making astute assessments of how much debt they can afford, others may simply not be in a place to make a pricy investment in their future earnings.

Impact Of Student Debt On Homeownership

Homeownership may be a staple of the American dream, but it comes with a price tag.

Not only does a high monthly loan make it difficult to save for a down payment, but high debt can also make getting approved for a home loan impossible.

Overall, homeownership was one of the most delayed life milestones due to student loans. Those with student loans over $100,000 were most likely to say student loans had delayed homeownership.

Impact Of Student Debt On Marriage

10% of our respondents have delayed marriage due to student debt. Borrowers with over $100,000 in debt were most likely to delay saying “I do” due to student debt.

Interestingly, marriage can have many tax implications for student loan interest deductions. For example, if you and your spouse together earn more than $160,000, you are no longer eligible for the student loan interest deduction.

However, there are other implications for marriage with high debt, so we cannot say for sure if savvy tax choices are altering couples’ marriage plans.

Impact Of Student Debt On Parenthood

The birthrate is down in America. While student loans probably can’t bear the full responsibility, it is clear that a significant amount of our respondents have at least delayed parenthood due to student debt.

Impact Of Student Debt On Saving For Retirement

Retirement savings is another area where student loans can impact savings’ choices.

In addition to the above issues, we allowed respondents the opportunity to explain how student loans impact them. Below you can see a list of commonly cited issues not represented above.

Other Common Effects

  • Struggle to afford other necessities (housing, medical costs, etc.)
  • Stress, anxiety, and other negative psychological effects
  • Decreased credit
  • Unable to save for children’s future college costs

Methodology
Zippia.com, a career resource website, conducted a study of 500 workers with student loans to better understand the impact of student loans on the job market. All workers were recruited through Clickworker, a survey platform. Each worker was asked, in addition to demographic questions, the same question involving the impact of student loans on their life choices.

Student Loans Can Open Doors, But Close Some

Ultimately, student loans are needed for many students to complete higher education and obtain the career they want. The job market is much often kinder and has more options for those with a college degree.

However, excessive student loans can also lead many workers to have less options due to the burden of paying them back. Career choices can be limited- with job seekers not being in a position to hold out for a better job or negotiate strongly for higher pay.

However, while student loans can impact the job market, they also bleed into other life milestones. As one respondent put it, “I might never be a parent because of my student loans. I also can’t purchase a house. I feel stuck in a bad marriage due to not being able to afford living alone.”

class="">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
American Dental Education Association
National Center for Education Statistics
CollegeBoard Trends
Studentaid.gov
CollegeBoard Student Aid Figures
MeasureOne
The College Payoff
TICAS Greatest Risk Of Default
TICAS Class Of 2018
TICAS Student Debt Figures
CollegeBoard Resource Library
Saving For College
US Department Of Education
Urban Institute

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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.

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