Oct 28, 2020 01:47 PM EDT
The updated student loan debt statistics claim that 45 million borrowers owe more than $1.6 trillion in debt. But these statistics aren't the full details of who really owes student loans.
Here is what to know about it. First, let's breakdown the latest Federal Reserve data and Brookings research of federal student loans. It accounts for more than 90% of all the outstanding loans, as per Forbes.
The data shows the highest income earners owe 60% of the outstanding student loan debt and have about 75% of all student loan payments. Meanwhile, the lowest-income earners owe less than 20% of the outstanding debt and make the only payment.
Economic realities such as those with a college degree earn more income, and with higher income can make more student loan payments, the date reflects. On the other hand, low-income student loan borrowers might be enrolled in an income-driven repayment plan that could decrease their student loan payment to as low as $0/monthly.
According to Forbes, only 6% of borrowers owe more than $100,000 student loan debt, while 2% owe more than $200,000. However, approximately 18% of borrowers owe less than $5,000 in student loan debt. This rate represents 1% of all student loan debt.
Most student loan debts are from graduate school and not from college. The latest data revealed that 56% of student loan debt came from graduate school. Among the 56%, an estimated 365 hold master's degrees, and 30% hold professional or doctoral degrees.
Typically, but not always, borrowers with professional or graduate degrees earn more salary than a borrower with a college degree. Besides, those who attended graduate school potentially become more financially secure.
However, the updated statistics provide an essential reminder that broad policies to forgive student debt across the board or waive monthly payments won't effectively address the problems facing those who are most affected by the COVID-19 pandemic. Instead, those borrowers would exacerbate the long-term trend of the economic inequality between those went to college and those who have not.
As per US News, transferring schools could affect student loans and the overall financial aid package you are receiving, whether you plan to move at the end of the school year or the end of the fall semester.
If you plan to transfer from another college, you must know which of the credits earned at your current college will follow to your new school. However, unlike credits, student loans never transfer between schools because the cost of attending your current school is a factor in identifying your financial aid award, including eligibility for student loans.
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