Student Loan Debt by Age

Millennial and Gen X borrowers have the highest total student loan debt balances

Like other significant debts, student loans can follow a borrower for a substantial portion of their life. Additionally, loan debt affects some people more severely than others, with notable differences by race, gender, and age group.

When you look at student loan debt by age, the discrepancies among age cohorts are affected by both the tuition rates in effect, when the members of each age group attended college, and by whether the older cohorts took on additional or new debt by co-signing or borrowing on behalf of a family member. Additionally, interest rates can increase loan balances over time, even as participants begin paying them off.

Because student loans aren't self-amortized, borrowers do not have the luxury of a set repayment schedule to ensure that an agreed-upon term repays the debt. When it adds up, student debt can cause a variety of financial hardships, but how keenly a person feels it may be different depending on their age and stage of life.

Key Takeaways

  • Student debt in America is in the trillions of dollars.
  • Higher education costs continue to rise, as do loans to attend college or university.
  • Parents who pay their student loan debt and their children are among the most financially vulnerable student loan debt holders.
  • Individuals aged 50-to-61-year-old have the highest average student loan debt, with 35-to-49-year-olds following close behind them.
  • Generational wealth may play a role in how much student loan debt a person accumulates and how fast they pay it off.

Understanding Student Loan Debt

Student debt represents how much an individual owes after securing financing for higher education from the federal government, a private lender, or both. This money can cover tuition, textbooks and other school supplies, basic living expenses, and other costs.

As of Q3 2022, at $1.77 trillion, Americans collectively owed more student loan debt than the gross domestic product (GDP) of most countries on Earth. Those who cannot afford their debt repayments will experience their loans becoming delinquent if late by one day. This can result in their debt defaulting after a sufficient amount of time passes without payment. 

Having loans that lapse into either of these states can significantly damage a borrower's credit score and credit report. Keeping up with timely loan repayments can also make it harder to save for emergencies and major purchases, such as a house or a car.

Age and Student Loan Debt

Given that the cost of higher education has continued to rise—and considering that debt fluctuates over time depending on payments and interest rates, borrowers would owe different amounts depending on their age.

These are the most common age groups, which will serve as the "baseline" for this article: Should a source use different age ranges than the ones listed above, their data will be presented as reported. Additionally, as many of these studies are not updated annually, data may be sourced from different years. Below are the findings from our research on student loan debt by age.

  • 24 and Younger: Generation Z (10–24)
  • 25 to 34: Majority of the millennial generation
  • 35 to 49: Millennials (35–41); Generation X (42–49)
  • 50 to 61: Generation X (50–57); baby boomers (58–61)
  • 62 and Older: Baby boomers (62–76); silent generation (77–94)

Why Is Student Loan Debt Different Than Other Debt?

What makes student loan debt different from many other kinds of borrowing is that it can have a multigenerational impact. If your parents take out money from their retirement to pay for college or pay off their child's student loans, it can impact their safety net for the future. In addition, student loans are essentially unsecured debt. Unlike a mortgage, where your home acts as collateral, you cannot recoup an education.

Most students will likely have to take out a student loan, as potential scholarships and/or parental financial assistance may not be enough to cover all expenses. What's more, the amounts borrowed will likely continue to rise in the future, given that the cost of education has been steadily increasing.

Size of Student Loan Debt by Age

The first factor to consider is the actual size of each group's debt burdens. As it's effectively impossible to visually represent the loan amounts of each U.S. citizen, there are two ways we can analyze this data.

Comparing the average student loan debt by age group provides a rough estimation of which generations have the highest debt burdens on an individual level. Meanwhile, the total amount owed by each group gives us a better understanding of which generations have taken on the most student loan debt.

Based on data from the office of Federal Student Aid, at $45,138, 50-to-61-year-old borrowers had the highest average student loan debt in Q4 2022. The 35-to-49-year-old cohort was close behind at $43,438 on average. The 24-and-younger group owed the least student loan debt, at $14,315 on average. This is unsurprising, given that the majority of borrowers who fall within this age range haven't had much time for interest to accumulate—or to complete graduate school.

When looking at total student loan debt by age, at $634.2 billion in Q4 2022, 35-to-49-year-old borrowers owed the most substantial amount. The second-highest amount belonged to the 25-to-34 demographic, which owed $497.6 billion in total as of this same period. Those between 50 and 61 owed $293.4 billion. At $107.3 billion, the smallest amount of total student loan debt belongs to the 62-and-older group.

43.5 million

The average number of Americans carrying student loan debt as of Q4 2022.

Who Has the Least Debt?

According to Federal Student Aid, 24-and-younger borrowers are the only age group to owe less student loan debt in 2022 than in 2017. This may be the result of declining college enrollments.

The other groups have experienced their total debt burdens increasing at different rates. For example, the total student loan debt owed by 62-and-older borrowers has increased by $55.4 billion from Q2 2017 to Q4 2022. This could result from the oldest borrowers having either returned to school to improve their career prospects or taken out loans to support their children/grandchildren's education(s).

Meanwhile, even though they owe far more per borrower, 25-to-34-year-olds only experienced an $20.2 billion increase. These numbers are far lower than the $149.5 billion increase in total borrowing experienced by 35-to-49-year-olds over the last five years.

One issue with student debt is that an older generation could be both paying their own education debt and helping to pay for college for their children by co-signing or paying student loans.

Student Loan Debt by Age and State

Additionally, due to education costs and other expenses varying by state, the amount of student loan debt by age differs between each U.S. state. This can be seen both in how many borrowers reside in an individual state and the total amount owed by each age group.

When looking at Federal Student Aid's state-by-state breakdown of student loan debt as of Sept. 30, 2022, California is notable for having the highest values in almost all measured categories:

  • Total Borrowers: 3.9847 million
  • 24 or Younger (Total): $7.88 billion
  • 25 to 34 (Total): $49.55 billion
  • 35 to 49 (Total): $56.40 billion
  • 50 to 61 (Total): $24.53 billion
  • 62 and Older (Total): $9.82 billion

Conversely, Wyoming has the lowest values in nearly every measured category:

  • Total Borrowers: 56.6 thousand
  • 24 or Younger (Total): $0.09 billion
  • 25 to 34 (Total): $0.47 billion
  • 35 to 49 (Total): $0.76 billion
  • 50 to 61 (Total): $0.30 billion
  • 62 and Older (Total): $0.10 billion

How Age Shapes Student Loan Debt

The differences among the age groups tell how Americans experience student loan debt over a lifetime—first their debt and then, potentially, debt for children and sometimes grandchildren or other family members. The above statistics indicate that 50-to-61-year-old borrowers are the most impacted by high student loan debt, followed closely by 35-to-49-year-olds.

However, it's important to remember that correlation doesn't necessarily equal causation, and the Fed's data doesn't tell the whole story. In addition to age in and of itself, the following three factors are also crucial for understanding student loan debt balances by age:

  • Number of Borrowers: The number of individuals within an age range will naturally affect the total student loan debt owed by said group. This information can also calculate a cohort's student loan debt per capita.
  • Generational Wealth: Borrowers with greater access to generational wealth will have more resources to pay down student loan debt faster, without sacrificing their ability to save for other important purchases.
  • Delinquency and Default: Those who cannot repay their debt will experience their balances increasing over time. The impact on their credit will limit their ability to support themselves financially.

Which Age Group Has the Most Borrowers?

The number of borrowers per group is one of the most important contextual pieces of information to have when analyzing student debt by age. After all, if one age range has a higher debt burden than another and has more borrowers, then it's safe to assume that the higher amount is at least partially the result of more people taking out similar amounts of debt.

According to Federal Student Aid, the largest group of borrowers was 25-to-34-year-olds, at 15 million as of Q4 2022. Close behind them were 35-to-49-year-olds, a group of approximately 14.6 million borrowers during that same year. The third-largest, 24-and-younger borrowers, was noticeably lower, with 7.3 million. The smallest amount was the 62-and-older group at 2.6 million.

Which Age Group Owes the Most Per Person?

Although the average student loan debt by age group is a helpful way to gauge how much each member of a particular generation might owe, it's neither the only one nor the most accurate. By dividing the total student loan debt per generation by the relevant number of borrowers, we can calculate student loan debt per capita by age. Although this effectively assumes that all borrowers have the same amount of debt, which isn't true, it allows us to get a similar number to the average while still seeing how it's changed over time.

As of Q4 2022, the 50-to-61 age group had the highest average student loan debt per person, at $45,138. The 35-to-49 age group was close behind, with an average of $43,438 per capita. At $14,315, borrowers 24 years old and younger had the smallest student loan debt on average. The 62 and older age group has experienced the most significant increase in their average student loan debt since 2017. Conversely, the 24-and-younger range was the only one to experience a decrease in the average student loan debt per capita during that same period.

Based on this data, we can infer that the larger number of borrowers may explain why the 35-to-49 years old group's burden is so high. After all, the more borrowers there are, the more debt there will be in total. However, the 25-to-34 group ought to have the highest debt balance by that logic.

Additionally, this doesn't explain the average debt balances by age group. If the number of borrowers mattered, then the 25-to-34-year-old borrowers wouldn't owe less on average than the 50-to-61 and 62-and-older groups. Although the amount of borrowers in a given age range likely affects the amount of debt owed, it is just one factor among several.

Which Age Group Has More Generational Wealth?

Generational wealth is a trickier factor to quantify, as it comprises several different elements. Generational wealth can take the form of gifts (whether these be sums of money or valuable items) and pay for educational and/or medical expenses. Then there's inheritance, which is when a person can receive the bulk of their family's generational wealth en masse after a relative's passing if they were included in the deceased's will.

The main idea is that if a family has had more wealth across generations, their descendants will have greater financial resources outside of what they earn through their careers. The opposite is true, as those with less access to generational wealth may have to spend more of their earned income to support their still-living family members. The much heavier student debt burden faced by people of color stems mainly from America's substantial generational wealth gap by race.

According to VoxEU, 19% of U.S. households surveyed between 2010–2014 reported receiving an intergenerational wealth transfer, the majority of which were in the form of inheritances. Individuals over 65 years old received the largest share of generational wealth transfer during this time frame, and those under 35 received the minor share—38.4% and 4.6%, respectively.

Having greater access to generational wealth may be one reason the oldest age group has the lowest total student loan debt. Others are that they likely have paid off their own student debt and many or all borrowed for their children. In addition, college costs when they were students were much lower than they are now. Despite accounting for the second-largest share of total wealth transferred, the 35 to 49 group still has the highest student loan burden.

Which Age Group Is More Likely to Miss Payments?

The serious consequences of failing to make on-time payments make high student loan burdens a major stressor. However, having large amounts of education debt doesn't necessarily correlate with difficulty repaying it (think of a physician in a thriving practice repaying medical school loans). To determine which age groups are genuinely struggling with their education debt, we must consider default rates and delinquency amounts by age.

According to reports, prior to COVID-19, the total amount of delinquent student debt owed by each age range was lowest for the most overdue loans. Borrowers aged 35-to-49 had the highest amount across all categories, with their $15.5 billion owed for the 31–90 days delinquent category being the highest overall. Close behind this group was the 25-to-34 age range, owing $12 billion for the same period.

However, the third-lowest group owed slightly over half as much as its predecessor within this time frame. At $0.05 billion, the lowest overall amount was owed by 24-and-younger borrowers with debt payments that are 361+ days delinquent.

How much student loan debt does each age group have on average?

Based on data from the office of Federal Student Aid, this is the average amount each age group owed in student loan debt as of Q4 2022:

  • 24 and Younger: $14,315
  • 25 to 34: $33,173
  • 35 to 49: $43,438
  • 50 to 61: $45,138
  • 62 and Older: $41,269

How long will it take me to pay off my college loans?

It depends on the type and number of loans you have taken out to pay for school. The Standard Repayment Plan takes 10 years to pay off all federal loan types except Direct Consolidation Loans and FFEL Consolidation Loans, which can take up to 30 years.

Are student loans forgiven at a certain age?

In the U.S., federal student loans are not automatically forgiven at any age; however, under certain circumstances, some borrowers may be eligible for loan forgiveness, cancellation, and/or discharge.

The Bottom Line

With so many factors in play, it's difficult to nail down specific reasons for the discrepancies in student loan debt by age—or whether the patterns we see today will continue. Current Federal Student Aid data shows that middle-aged borrowers are struggling the most with high student loan debt, and they are the most likely to suffer from delinquency and default as a result.

We don't know whether millennial and Gen X borrowers will receive increased wages and experience lower debt burdens over time, as has happened with today's older age cohort. Or will they carry their student debt problems into later years, resulting in a new debt surge in older age groups? One concern: Social Security benefits can be garnished to pay federal student debt.

Total student loan debt balances have been steadily increasing across nearly all age ranges over the last four years, which could be a result of the growing cost of education.

Once more members of Gen Z graduate and have time to accumulate interest, we should gain a better understanding of the long-term impact of age on student loan debt.

Article Sources
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