What percentage of students pay off their student loans?

When it comes to higher studies in the US one cannot deny that it is very costly. The average tuition cost in the US for college graduation is roughly $30000-$40000 annually. If one’s financial situation is not particularly good, he or she cannot attend college. For this student loans are provided, to give an opportunity for one to continue their higher studies. As of 2021 almost eight million Americans ranging in age from 18 to 25 carry student loans with an average debt of $40000. A group of 3 students in the US 1 now has to go into debt to get through college. But are they able to pay off their student loans or what percentage of students pay off their student loans, let us know about this in detail?

What percentage of students pay off their student loans?

According to the NCES data out by the type of college.

In private schools after twelve years of attending college 16.5% of students have paid their student loans.

In public universities, 27.5% of students have paid their loan

Factors that affect loan repayment:

  1. Earnings After the graduation

    Boosting the earnings of a graduate after graduating can help pay off the loan in time and avoid default. Referring to NCES’ analysis of repayment rates through earnings, the percentage of students who paid their student loans 12 years after starting college is averaging 27.5%.

  1. The Amount Borrowed

The Larger the amount borrowed the longer it takes to repay. It also has risks if a student drops out of college with a large amount of borrowing. Thus, the smaller loan balances are paid in time more often. NCES’ analysis of repayment of loans concerning the amount of borrowing the average percentage of students who paid their loans after 12 years is 23%.

Federal Student Loan Debt Owed by Age Group:

According to the U.S Department of Education Data

People of age 62 and uphold $65.2 billion in federal Student loan debt.

At age 50-61 the number of people is 5.8 million and the borrowing is $219.4 billion.

In age 35-49 the number of people is fourteen million owing $504.3 billion.

In the age group, 25-34 15.2 million borrowers owe $494.8 billion.

And at last, under 24 years of age, the number of borrowers is 8.5 million owing $125.4 billion.

This data shows that a total of 45.4 million borrowers owe a huge sum of $1.4 trillion in Federal Student loans as of Sept. 30, 2018.

From the above data, we can also say that almost 50% of borrowers pay off their student loans by the time they age 50.

Pros And Cons of Student Loans:

Student loans can surely be a blessing for someone as everyone does not have the suitable financial level for attending a pricey U.S college. It can help overwhelm poverty if it is used properly by the borrower and can change his or her life.

Now let’s consider the pros and cons of taking a student loan for college graduation:


  I) Firstly, it helps one to realize one’s dream to attend college and pursue their Dream Career.

 II) If installments are made on time, it can help create a good credit score.

III) By taking a student loan you can level up your career and a higher education degree is often a catalyst for a more successful and stable Career.

IV) Student Loans can be the difference between an okay University and your dream University.


 I) When taking a student loan, the borrower kind of takes a gamble, assuming he will get his degree successfully and earn that much that he or she can pay off the principal amount with interest.

II) If a student defaults on paying off his or her debt they have to pay extra penalties and extra interest on the principal amount, and it also means a poor credit score.

III) By taking a student loan it means you are starting your adult life under debt.

IV) Heavy amounts of debt can cause stress on anyone, thus cannot enjoy his life fully.

V) a Large amount of Debt can get in the way of your lifestyle as well, you will earn more than your peers, but you will pay more than your peers too although it will be for that time only.


From the above article, we can conclude that an average of almost 25% of students pay off their student loan debt after 12 years of attending college. Some carry their debt until their retirement and almost half the percentage of students pay off their student loans by the time they reach 50 years of age.

Earnings after graduation and the amount of loan borrowed are the two main factors in the repayment of the debt. It can heavily affect the borrower as if his earnings are not at par with the amount he or she borrowed he or she would not be able to pay their installment. Which will result in default, which will increase penalties and interest on the principal and at last get them a poor credit score.

Frequently Asked Questions:

I) Is Taking a Student Loan for College Graduation Worth it?

 Of course, taking a student loan for pursuing higher studies is worthwhile if you are dedicated. It will give you a boost in your career and will help you in getting to your dream college. It can be the difference between your dream college and some college.

II) What would happen if you failed to pay the installments of the loan?

If you fail to pay off your installments you will get penalties, could be charged with an extra interest rate, and maybe there could be an increase in the principal amount. It will also demolish your credit score.

III) What Is the ideal time for paying off student loan debts?

It depends on you totally; some people take the debt to their retirement. Some pay off the debt by the age of 50, some even pay the debt fully in only 12 years. So, it’s totally up to you, your finances, and the time you need to pay.