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NextGen Magazine


Share of Students Graduating with at least $20k in Debt Doubled Over 15 Years

Chris Gaetano
Published Date:
Aug 17, 2017

The proportion of students who have graduated college with $20,000 or more in debt has doubled in the past 15 years, according to a recent report from the Consumer Financial Protection Bureau. Such borrowers, at that time, made up only 20 percent of all student loan borrowers entering repayment. Today, however, they make up more than 40 percent of all borrowers entering repayment. The CFPB came to these numbers after combing through the credit records of more than 1 million people who had at least one student loan and first entered repayment between 2002 and 2014. 

Using this information, the CFPB also found that: 

* Student loan borrowers are older now than in years past: the share of borrowers younger than 25 fell from 30 percent in the 2002 cohort to 15 percent in the 2014 cohort while the share of borrowers 35 or older almost doubled over this period. However, there is remarkably little variation in repayment speed by consumer age despite potential differences in income or resources and the repayment progress of recent older borrowers is not noticeably different from older borrowers in the early or mid-2000s.

* Among student loan borrowers making large enough payments to reduce their loan balances, the median number of months remaining until full repayment is lower for recent cohorts than for earlier cohorts.

* Meanwhile, the share of borrowers not making payments large enough to reduce their balances has increased, particularly among borrowers with loans smaller than $20,000. Indeed, five years after starting repayment over 23% of these small-loan borrowers in recent cohorts are not making payments large enough to reduce their balances. While some of this trend likely reflects the growth of income-driven repayment plans, over half of this group is made up of borrowers who are delinquent or in default on their student loans.

* Holding the amount borrowed constant, student loan borrowers whose repayment period began recently have fully repaid their loans at rates similar to those whose repayment period began fifteen years ago. However, 25 to 30 percent of the borrowers in the older cohorts do not pay off their loans within the standard 10-year repayment period, and the more recent cohorts appear to be following the same trend.