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Updated February 4, 2019
A Snapshot of Federal Student Loan Debt
Counts of students who borrowed federal student loans,
amount borrowed increased to $23,700. That year, graduate
average amounts borrowed, and average cumulative federal
students borrowed 37% of Title IV loan dollars disbursed.
student loan debt have all increased substantially in recent
years. Expanded repayment flexibilities have allowed
Cumulative Amounts Owed
borrowers to make smaller payments over extended periods
Students often borrow more than one loan and cumulative
of time. Year after year, more student loan dollars are
borrowing has increased in recent years. Figure 1 shows
disbursed than are repaid, resulting in an expanding federal
changes in cumulative debt for program completers.
loan portfolio. Nearly 43 million individuals—one in six
adult Americans—have federal student loan debt, and the
Figure 1. Average Cumulative Amounts Owed on
federal student loan portfolio now exceeds $1.4 trillion.
HEA Title IV Loans at Program Completion
(Estimates for AY2003-2004 through AY2015-2016)
Annual Borrowing
The primary federal student loan programs are authorized
under Title IV of the Higher Education Act of 1965 (HEA).
U.S. Department of Education (ED) data show that from
academic year (AY) 1995-1996 to AY2011-2012, the
number of undergraduate students borrowing Title IV loans
increased by 124%, from 4.1 million to nearly 9.3 million,
while the average annual amount borrowed increased by
71%, from $3,800 to $6,500 (Table 1). In AY2015-2016,
undergraduate borrowing of Title IV loans decreased to 7.0
million, but the average loan amount rose to $6,700.
Table 1. Numbers of Students Who Borrowed
HEA Title IV Loans and Average Annual
Amount Borrowed
Source: ED, NPSAS: 2004, 2008, 2012, and 2016.
(Estimates for AY1995-1996 through AY2015-2016)
Notes: Nominal dol ars. Includes 50 states and DC only. Figures for
graduate degree programs also include undergraduate borrowing.
Undergraduate
Graduate
Undergraduate certificate. In AY2003-2004, 50%
Academic Number Average Number Average
(207,300) of undergraduate certificate recipients had Title
Year
(thousands) Amount (thousands) Amount
IV loans and owed an average of $6,300. In AY2015-2016,
1995-1996
4,140
$3,800
688 $10,500
60% (389,000) of certificate recipients had Title IV loans
and owed an average of $15,400.
1999-2000
4,522
$4,200
756 $12,300
2003-2004
6,147
$4,500
1,062 $14,600
Associate’s degree. In AY2003-2004, 31% (329,700) of
students who earned an associate degree had Title IV loans
2007-2008
7,187
$5,100
1,349 $17,700
and owed an average of $9,700. By AY2015-2016, 42%
2011-2012
9,266
$6,500
1,597 $21,200
(581,000) of associate’s degree recipients had Title IV
loans and owed an average of $19,900.
2015-2016
7,039
$6,700
1,427 $23,700
Source: ED, National Postsecondary Student Aid Studies (NPSAS):
Bachelor’s degree. In AY2003-2004, 58% (980,000) of
1996, 2000, 2004, 2008, 2012, and 2016.
students who earned a bachelor’s degree had Title IV loans
Notes: Nominal dol ars. Includes 50 states and DC only.
and owed an average of $16,900. By AY2015-2016, 63%
(1.3 million) of students earning a bachelor’s degree had
From AY1995-1996 to AY2011-2012, the number of
Title IV loans and owed an average of $28,900.
graduate students who borrowed Title IV loans increased by
132%, from 688,000 students to nearly 1.6 million, while
Master’s degree. In AY2003-2004, 55% (323,800) of
average amounts borrowed increased by 102%, from
students who earned a master’s degree had Title IV loans
$10,500 to $21,200. Increased borrowing was fueled in part
and owed an average cumulative total of $32,700. By
by graduate students becoming eligible to borrow PLUS
AY2015-2016, 54% (459,400) of master’s degree recipients
Loans in AY2007-2008. By AY2015-2016, graduate
had Title IV loans and owed an average of $63,700.
borrowing dropped to 1.4 million students, but the average
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A Snapshot of Federal Student Loan Debt
Doctor’s degree (research/scholarship). In AY2003-2004,
Consolidation Loan. Through loan consolidation, borrowers
44% (40,500) students who earned a doctoral degree in
begin a new repayment term that—depending on the loan
research and scholarship fields (e.g., Ph.D.) had Title IV
balance—may be for a period of up to 30 years. This may
loans and owed an average of $53,900. By AY2015-2016,
reduce the monthly payment amount, but may lead to an
45% (30,500) had loans and owed an average of $107,600.
increase in the total amount of interest paid.
Doctor’s degree (professional practice). In AY2003-
Student Loan Debt in the Aggregate
2004, 81% (75,400) of students who earned a professional
In just over a decade, the federal portfolio of outstanding
practice doctoral degree (e.g., M.D., J.D.) had Title IV
Title IV loans increased from $516 billion in loans made on
loans and owed an average of $74,500. By AY2015-2016,
behalf of 28.3 million students, to $1.4 trillion in loans
71% (87,100) had loans and owed an average of $181,400.
made on behalf of 42.9 million students (Figure 2).
Student Loan Repayment
Figure 2. HEA Title IV Student Loan Portfolio
Repayment of Title IV student loans may be structured or
(Outstanding principal and interest, FY2007 to FY2018)
temporarily delayed in myriad ways. Borrowers are relieved
of making payments on their loans while they are in school,
during a six-month post-enrollment grace period, while in
deferment, or when granted forbearance. Upon completing
or leaving school, borrowers may select from an array of
loan repayment plans. They may also extend the term of
their loans by including them in a new Consolidation Loan.
Student Loan Repayment Plans
Unless a borrower chooses otherwise, Title IV loans are
repaid according to a standard repayment plan, with equal
monthly installments paid over a period of not more than 10
years. Borrowers may also choose a graduated repayment
plan in which monthly payment amounts gradually increase
over time, or an extended plan in which borrowers with
Source: ED, National Student Loan Data System (NSLDS).
loan balances that exceed $30,000 may make smaller
Notes: Nominal dol ars. The loan recipient is the student on whose
monthly payments over an extended repayment period.
behalf a loan to a student or a parent is made.
Several income-driven repayment (IDR) plans are available
in which payment amounts are capped at a share of one’s
Federal Student Loan Policy Issues
discretionary income and the repayment period may extend
Congress may consider a number of policy issues related to
to 20 or 25 years. The IDR plans provide for the discharge
student loan debt in the context of reauthorization of the
of loan balances a borrower has been unable to repay by the
HEA, which authorizes the federal student loan programs.
end of the specified repayment term. Alternative repayment
plans may be offered to borrowers determined unable to
Loan availability. Should different constraints be
repay according to any of the other repayment plans.
established to limit how much student loan debt individuals
may incur or the extent to which postsecondary education
Interest Accrual and Capitalization
expenses may be financed with federal student loans?
For most Title IV loans (except need-based Direct
Subsidized Loans), interest begins accruing when a loan is
Loan repayment terms. What are the long-term benefits
disbursed and continues to accrue even during periods of
and costs to borrowers and society of loan repayment
delayed or deferred repayment. While borrowers may delay
flexibilities such as permitting repayment to be spread over
paying the interest that accrues during these periods, it is
an extended period of time or the making of reduced
eventually capitalized (i.e., added to the principal balance).
payments, which may lead to increased interest expenses or
Due to the accrual and capitalization of interest, many
to unpaid debt ultimately being forgiven or discharged?
borrowers owe hundreds or thousands of dollars more than
they initially borrowed when they begin making payments
Debt and societal well-being. How do the benefits of an
on their loans.
education financed by borrowing and the burden of student
loan repayment interact and affect borrowers’ opportunities
The IDR plans permit borrowers to repay their loans over
and choices concerning careers, family formation, home
an extended period of time and some borrowers may
ownership, savings, and wealth accumulation? What is the
qualify to make monthly payments of less than even the
appropriate balance between requiring borrowers to repay
interest that accrues on their loans (negative amortization).
their loans in full and offering loan forgiveness or discharge
If this occurs, the unpaid interest continues to accrue and
relief to certain classes of borrowers?
eventually may be capitalized into the principal balance of
the loan, thus increasing the total amount owed.
Sustainability of the federal loan portfolio. The federal
loan portfolio is expanding with new loans being disbursed
Loan Consolidation
at a faster rate than existing loans are being repaid. What
Borrowers may simplify and extend the repayment of their
are the long-term implications of the federal government
Title IV loans by including them in a new Direct
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A Snapshot of Federal Student Loan Debt
overseeing and administering a loan portfolio that
David P. Smole,
continues to grow?
IF10158
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