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By Nicolas Cesare
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The Biden administration announced its latest round of student loan forgiveness in December.
It forgave $5 billion for 80,000 borrowers who qualified for forgiveness under the income-driven repayment (IDR) and public service loan forgiveness (PSLF) plans.
These efforts are part of the Biden administration's broader plans to forgive student loan debt, after the Supreme Court blocked its proposal to forgive up to $20,000 for many student loan borrowers.
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The administration plans to forgive more student loan debt in 2024, but it's not yet clear what impact that will have on the total amount that borrowers carry.
Total Student Loan Debt
Americans owed a total of $1.73 trillion in federal and private student loan debt in Q3 2023, according to the Federal Reserve.
That breaks down to $1.63 trillion in federal loans and $103 billion in private student loans, Newsweek found by comparing the Federal Reserve data to other numbers released by the Department of Education.
Total student loan debt decreased by about $28 billion between Q2 and Q3 2023. However, it's not clear how much of the difference is due to the Biden administration's student loan forgiveness efforts and how much is the result of payment plans restarting in October.
Average Federal Student Loan Debt
The average borrower owes about $37,600 in federal student loans. Here's a breakdown of average federal student loan debt by loan type based on Department of Education data:
Average student loan debt doesn't tell the whole story. Here are other interesting federal student loan debt statistics:
- Over half of all borrowers are under 34 years old.
- Most borrowers owe less than $20,000 in federal student debt.
- About 3.3 million borrowers are repaying their loans with the Biden administration's new SAVE Plan—formerly called the REPAYE Plan.
Average Private Student Loan Debt
Only 9 percent of bachelor's degree recipients graduating from four-year public institutions have private student loan debt, according to a report from the College Board. Those borrowers have an average of $34,600 in private student loan debt.
Only 13 percent of bachelor's degree recipients graduating from private nonprofit four-year institutions finished school with private student loans. Their average private student loan debt was $44,600.
How Long Does It Take To Pay Off Student Loans?
Under the standard repayment plan—used by about 11 million federal student loan borrowers—it takes 10 years of regular payments to pay off your student loans.
However, many borrowers use graduated, income-driven and Pay As You Earn (PAYE) plans with different repayment terms. For most plans, the Department of Education will forgive any outstanding debt after 20 to 25 years of monthly payments.
Will There Be Additional Student Loan Forgiveness?
In addition to existing student loan forgiveness options, we expect the Biden administration to strike more borrowers' balances in 2024.
As Newsweek previously reported, the Biden administration is targeting certain borrower groups for student loan forgiveness:
- Borrowers who currently have outstanding federal student loan balances that exceed what they originally borrowed
- Those with loans that first entered repayment 25 or more years ago
- Those who took out loans to attend career-training programs that created unreasonable debt loads or provided insufficient earnings for graduates, as well as borrowers who attended institutions with unacceptably high student loan default rates
- Those who are eligible for other loan-forgiveness programs under repayment plans like income-driven repayment or targeted relief programs like Public Service Loan Forgiveness, or closed school loan discharges, but did not apply
The administration may also forgive debt for borrowers experiencing hardship not currently covered by the student loan system.
Follow Newsweek for the latest reporting on student loan forgiveness.
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