The Truth About Student Loan Debt

These days, we hear a lot about student loan debt and how it’s really weighing down on students. I’m not saying that this isn’t an issue that college students have to deal with, but it’s certainly not as horrible as many people think it is. Many students don’t receive much financial aid. Others may have private loans, but when we hear about student loan debt, it’s usually federal aid that’s being discussed.

Most of the time, when we talk about federal aid for college students, we hear more about how hard it is for these students than we hear about the actual amount of debt. What do you think the average amount of student debt is? $50,000? $60,000? You may be surprised to find out that any guess over $30,000 is way off.

The “High Average” Everybody is Scared Of

According to data from The Institute for College Access and Success, the average general student debt in America is $26,421. According to this same data, the debt of students who attended public colleges is $25,665 and the debt of students who attended private colleges is $28,498. While these amounts are large, they aren’t the hundreds of thousands of dollars that we’re led to believe people with a bachelors degree have.

Now that the readers have been given the average undergraduate loan amounts, what about the loan limits? What do you think the maximum amount an undergraduate student is allowed to receive is? According to the U.S. Department of Education, dependent students whose parents are able to obtain PLUS loans are allowed to receive up to $31,000 during their college career. Independent students and dependent students whose parents are unable to obtain PLUS loans are allowed to receive up to a maximum of $57,500 over their college career. All undergraduate students are allowed to have up to $23,000 in subsidized loans.

Why is This Average So Low?

Many may wonder how the average debt amount could be so low. I personally believe that it has something to do with the federal pell grants that many students receive. A full pell grant is $5,730 per year. Over the course of four years, $22,920 of a student’s education, if they always receive full pell grants, is at no cost to the student. This is great, that is, if tuition wasn’t so high.

BYU-Idaho is a great example of how a full pell grant helps independent students who are eligible for one. According to BYU-Idaho’s website, the high end of cost of attendance for LDS people is $6,025 per semester. If this is attainable for a student, then their total incurred costs over four years is $48,200. Luckily, since full pell grants are useful, students that stick to this cost of attendance would be stuck with just $25,280 in debt, nearly half of the original cost.

Why is This So Important?

When discussing the amount in loans that a student is able to receive, federal pell grants cannot be excluded. Pell grants are not loans, but they do allow a student to incur more costs than loans alone. If we continue to ignore the data that is available to us, then we will end up not only being more ignorant, but we may also misappropriate public funds that could’ve been better used elsewhere.

It’s important to remember that $57,500 is a lot of money. But it’s just a maximum that isn’t usually met by undergraduate students. Why is this important? Because it really puts the situation into perspective. If we knew that student loan debt is averaging near $26,000, we wouldn’t feel as bad for students who didn’t pay them off. Instead, we would feel much worse about not supplying these graduates with the jobs they need to pay back their loans.

USA Today will have you believe that the student loan debt is averaging at $33,000. This isn’t true as a national average because, if it is true to any extent, it most likely is a representation of mostly private school student loan debt. It’s no secret that USA Today, just like any other news source, has political bias to it. This is why we should look into every source that we can find and make decisions for ourselves.


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