Average Student Loan Payment

Since the start of the COVID-19 pandemic, the government has temporarily suspended payments and interest on federal student loan debt. President Biden recently extended the student loan payment pause again. Borrowers can plan to start making payments on July 1, 2023.

If you're a student, you don't have to begin paying off federal loans as long as you're in school full time.^[3] (Though you can if you're able.) You should still know your loan details, including what and when you're expected to pay.

This report covers average student loan payments for recent college grads for different school types, loan types, and degrees.

Average Monthly Student Loan Payment

To calculate average student loan payments, we started with borrowers' average federal student debt at graduation. We do not use the average student loan debt for all borrowers, which includes people who have repaid much of their debt and those whose debt has grown.

We assumed a standard 10-year term^[4] and applied the current federal interest rate — 4.99% for undergraduate student loans and 6.54% for graduate student loans.^[5]

The average student loan payment varies across factors, including:

• Degree
• School type
• Loan type — federal or private
• Repayment plan

Average Student Loan Payment by Degree Level

The average student loan payment for borrowers who recently completed any undergraduate program is $244.^{Note Reference [1]} Graduate programs tend to cost more. So, grad student borrowers take out higher loan amounts and have higher monthly payments over the standard loan term.

Average Student Loan Payment by School Type

Bachelor's degree-holders from private for-profit colleges tend to have higher federal student loan payments than those from public or private nonprofit schools. On average, their monthly payments are close to $100 more than graduates of public colleges.

Private Student Loan Payments

Private student loans may have different interest rates and terms than federal loans. They frequently do not have a grace period while you're in school. In addition, private lenders don't report average student loan amounts to the government, so the data is harder to come by.

We applied a typical range for fixed interest rates across a few different loan amounts and terms. Typically, longer loan terms mean higher interest. Below, see how interest rates impact monthly payments. Keep in mind that payment amounts can change monthly for loans with variable interest rates.

Student Loan Payments for Income-Driven Repayment Plans

If you're struggling to make student loan payments, you can enroll in an IDR plan. In IDR plans, you pay a percentage of your discretionary income — what you earn over a threshold set by the government. IDR loan terms are longer, lasting 20-25 years. You can only use these repayment plans for federal loans.

IDR plans have different payment requirements:^[6]

• Revised Pay As You Earn (REPAYE): 10% of your monthly discretionary income
• Pay As You Earn (PAYE): 10% of your monthly discretionary income, as long as it does not exceed the standard loan payment amount
• Income-Based Repayment (IBR): 10% of your discretionary income for new borrowers; otherwise, 15%
• Income-Contingent Repayment (ICR): 20% of your monthly discretionary income

The Biden administration has announced a new IDR plan, planned to open for enrollment July 1, 2023.

You can find out what you would owe on an IDR plan using the ED's Loan Simulator.

Average Monthly Student Loan Repayment in Prior Years

Federal student loan interest rates have fallen in the past 15 years. With them, the average student loan payment has decreased.

The graph below depicts monthly student loan payments based on the average federal loan amount awarded to undergraduate students each year (not necessarily undergraduates' cumulative loan amount at graduation).

Frequently Asked Questions About the Average Student Loan Payment

How are student loan payments calculated?

Your monthly student loan payment depends on different factors:

• Interest Rate: Federal student loan interest rates for new loans change yearly. Private interest rates are different for everyone.
• Loan Term: Most federal student loans have 10-year terms. Private loan terms vary.
• Your Income: If you enroll in an IDR plan, you pay a certain percentage of your discretionary income toward your student debt over a longer term.

How much are student loan payments?

The average monthly federal student loan payment for recent bachelor's degree-recipients is $278.^{Note Reference [1]} People generally borrow more and have higher interest rates for graduate degrees. Therefore, their monthly payments are higher. Average federal student loan payments for master's degree-holders are about $572 a month.

If you cannot afford your federal student loan payment, you may enroll in IDR. On an IDR plan, you usually pay 10-20% of your discretionary income against your student loans for 20-25 years.

When do student loan payments resume?

Federal student loan payments are scheduled to resume on July 1, 2023. You can start financially preparing to repay your student loans before then.