Student Loan Balances Barely Budge in 2021

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As Americans await a decision from Washington about student loan forgiveness, student loan borrowers still collectively owe $1.59 trillion in loans, more than Americans owe on either their auto loans or credit card balances.

Student Loan Balances Barely Budge in 2021 article image.

Student loan balances stayed roughly stable in 2021, almost certainly a result of the continuing repayment and interest pause that began in the spring of 2020 for most federally backed student loans. Most consumers with student loan debt have taken advantage of forgoing monthly student loan repayments—the suspension of which has continued through August 2022. Because interest is not being charged on existing federal loan debt, accruing interest is not growing the debt balance either.

As a consequence, student loan debt barely budged in 2021, despite it being one of the fastest-growing types of consumer debt for several years prior to the pandemic. Student loan borrowers still collectively owe $1.595 trillion in loans, more than Americans owe on either their auto loans or credit card balances.

Snapshot: Total Student Loan Debt
2019 2020 2021 2020-2021 Change
Total student loan debt $1.511T $1.570T $1.595T $25.4B (+1.6%)

Source: Experian; data from Q3 of each year

The 1.6% increase in total student loan debt in 2021 is much lower than the 5% to 7% annual increases since 2010.

The number of student loan accounts barely grew as enrollments continued to decrease, likely due to the uncertainty surrounding the pandemic and academic scheduling.

Number of Student Loan Accounts in the U.S.
2019 2020 2021 2020-2021 Change
164.7M 165.2M 165.9M +71,000 (+0.4%)

Source: Experian; data from Q3 of each year

Average Student Loan Balance up Slightly

Similarly, average student loan balances grew less than in previous years. The 1.8% increase in average student loan balances reflects a change similar to what was observed with total balances.

Snapshot: Average Student Loan Average Balance
2019 2020 2021 2020-2021 Change
$35,928 $38,792 $39,487 $695 (+1.8%)

Source: Experian; data from Q3 of each year

Average FICO® Scores of Student Loan Borrowers Improve

Student loan borrowers saw their average FICO® Score improve in 2021, climbing an average of five points from 689 to 694. While 20 points lower than the national average, a 694 FICO® Score is still considered a good score, meaning borrowers can qualify for more types of loans at more favorable rates than consumers with lower scores.

Average FICO® Scores for Those With and Without Student Loans
2020 2021
Average FICO® Score for consumers with one or more student loans 689 694
Average FICO® Score among all consumers 711 714

Source: Experian; data from Q3 of each year

Average Student Loan Balance Increases Slightly in Most States

Despite the pause on required student loan payments for government-backed student loans, overall student loan debt increased modestly across the 50 states and Washington, D.C. The increases ranged from as little as 0.4% in Mississippi to 4.9% in Vermont. In comparison to other types of consumer debt, where some states saw double-digit increases in mortgage balances, increases in student loan balances were much more subdued.

Average Student Loan Balance by State
Average Balance 2020 Average Balance 2021 Change
$39,449 $40,150 +1.8%
$36,859 $38,448 +4.3%
$38,729 $39,493 +2.0%
$35,381 $35,864 +1.4%
$41,305 $41,930 +1.5%
$38,844 $39,555 +1.8%
$39,394 $40,075 +1.7%
$39,600 $41,028 +3.6%
District of Columbia
$60,666 $61,312 +1.1%
$40,896 $41,300 +1.0%
$44,905 $45,226 +0.7%
$38,063 $39,300 +3.2%
$35,609 $36,045 +1.2%
$40,331 $41,099 +1.9%
$35,036 $35,580 +1.6%
$32,088 $32,688 +1.9%
$34,538 $35,297 +2.2%
$34,947 $35,622 +1.9%
$37,461 $37,613 +0.4%
$35,406 $36,379 +2.7%
$45,952 $47,271 +2.9%
$38,919 $39,839 +2.4%
$38,527 $39,195 +1.7%
$34,799 $35,479 +2.0%
$38,927 $39,086 +0.4%
$37,209 $37,836 +1.7%
$34,276 $35,193 +2.7%
$32,867 $33,805 +2.9%
$37,471 $38,168 +1.9%
New Hampshire
$37,098 $38,125 +2.8%
New Jersey
$40,354 $41,154 +2.0%
New Mexico
$36,308 $36,699 +1.1%
New York
$41,087 $41,801 +1.7%
North Carolina
$39,997 $40,808 +2.0%
North Dakota
$30,469 $31,974 +4.9%
$37,439 $38,048 +1.6%
$34,517 $34,892 +1.1%
$39,692 $40,199 +1.3%
$38,213 $39,197 +2.6%
Rhode Island
$35,779 $36,639 +2.4%
South Carolina
$40,911 $41,586 +1.6%
South Dakota
$31,558 $33,012 +4.6%
$38,647 $39,177 +1.4%
$35,712 $36,385 +1.9%
$33,981 $34,466 +1.4%
$37,568 $39,407 +4.9%
$41,318 $42,382 +2.6%
$37,532 $38,460 +2.5%
West Virginia
$34,375 $35,199 +2.4%
$33,399 $34,432 +3.1%
$33,014 $34,354 +4.1%

Source: Experian; data from Q3 of each year

How Much Student Loan Debt Has Been Forgiven So Far?

Meanwhile, other student loan borrowers have been getting the balance of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. During the payment pause, public service and other eligible borrowers still receive credit toward the 120 months of payments required for discharge of the remaining balance, even though the student loan payment has been "$0" for more than two years.

Combining the various programs, only 146,000 of more than 1.3 million applicants have had the remainder of their student loan balances forgiven, according to May 2022 data from the Department of Education. But the average loan amount discharged was significant, averaging nearly $65,000 per borrower. The $9.5 billion in discharged student loans is a vast increase from the beginning of the PSLF program, when fewer than 100 applicants initially had their student loan debt discharged.

And the number of successful discharges is expected to further increase in the coming months, from this and other, smaller-scale forgiveness programs, such as those extended to borrowers with permanent disabilities.

But even if every single PSLF borrower received relief, it could pale in comparison to how many student loan borrowers could see their loans discharged by the federal government. Monthly federal student loan payments are still paused until August 31, 2022. The $64,000 question for student loan borrowers: How much, if any, of their current student loan debt may be forgiven in the coming months by the federal government?

While nothing has been confirmed, as of August 2022, the plan most often discussed is the forgiveness of up to $10,000 in federal student loan debt.

According to Experian data, roughly 29% of borrowers—approximately 14 million people―with educational debt have $10,000 or less in student loan debt. Presuming all of that debt is federal loans, that debt could be forgiven entirely.

Meanwhile, other borrowers could see a reduction of student loan balances. In total, potentially as much as $71 billion could be forgiven for those with $10,000 or less in balances, and another $319 billion for borrowers with more than a $10,000 combined student loan balance.

Learn More About Student Loan Debt

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