Using data from the Federal Reserve, Student Loan Hero — an organization that provides “resources, tools and information” to help “student loan borrowers understand their student loans and make intelligent repayment decisions” — reports that
Among the Class of 2018, 69% of college students took out student loans, and they graduated with an average debt of $29,800, including both private and federal debt. Meanwhile, 14% of their parents took out an average of $35,600 in federal Parent PLUS loans.
Americans owe over $1.56 trillion in student loan debt, spread out among about 45 million borrowers. That’s about $521 billion more than the total U.S. credit card debt.
11.5% of student loans are 90 days or more delinquent or are in default.
Average monthly student loan payment (among those not in deferment): $393.
What makes the statistics even more alarming is that only about 15 percent of student debt is private debt. Most of the money borrowed by students was borrowed from the deep pockets of Uncle Sam.
But it gets even worse.
According to the Final Audit Report of the U.S. Department of Education’s Office of Inspector General, “Federal Student Aid: Additional Actions Needed to Mitigate the Risk of Servicer Noncompliance with Requirements for Servicing Federally Held Student Loans,” Federal Student Aid (FSA), the agency within the Department of Education responsible for servicing all federal student loans, has not been doing a very good job:
FSA had not established policies and procedures that provided reasonable assurance that the risk of servicer noncompliance with requirements for servicing federally held student loans was mitigated.
FSA’s oversight activities regularly identified instances of servicers’ not servicing federally held student loans in accordance with Federal requirements.
FSA management rarely used available contract accountability provisions to hold servicers accountable for instances of noncompliance.
FSA did not provide servicers with an incentive to take actions to mitigate the risk of continued servicer noncompliance that could harm students.
FSA employees did not always follow policy when evaluating the quality of servicer representatives’ interactions with borrowers.