Student Loan Debts Mount: Thousands Waiting, Millions Indebted

The student loan debt picture is growing bleak. Recent numbers show the applicant wait list for Public Student Loan Forgiveness is rising, total student loan debt is mounting, and more people are expected to slip into delinquency.

The Big (and Small) Picture

The student loan debt crisis has millions of Americans in a financial chokehold, and it shows no signs of slowing down. Here’s where we currently are:

• $1.545 Trillion: The total federal student loan debt portfolio, according to the Federal Reserve Bank of St. Louis
• 42.5 Million: The total number of people with federal student loans. This is a few million greater than the entire population of California
• $144 Billion: The estimated amount of outstanding private student loan debt. This makes up roughly 7% of the student loan debt total.
• $39,075: The average amount of debt per borrower

These numbers are grim, but the impact on an individual level makes it even more shocking. Borrowers are holding back from major life events like purchasing a vehicle, buying a home, getting married, starting a family, and more, due to their debt. This significant weight also impacts borrowers’ mental health, with many saying it has caused depression, anxiety, panic attacks, and more.

Student Loan Debt Crisis at a Glance

Overpromise, Underdeliver

The Public Student Loan Forgiveness program was instituted in 2007 under President Bush to give borrowers an off-ramp to eliminate their student loan debt free through public service. The program has been marred with issues and continues to show its ineffectiveness. At one point, the program denied 99% of applicants.

Bringing it to today, thousands are stuck in limbo.

As of Aug. 31, 74,510 applications were pending for the PSLF Buyback program. In July, it was 72,730. At the end of June, it was 65,448. Applications are being processed, but the stack of applicants is outpacing approvals. This comes in the wake of the Trump administration’s downsizing of the Department of Education and the Biden administration’s largely unsuccessful efforts to pass widespread student loan debt reform.

Tens of thousands of borrowers who banked on being approved for loan forgiveness remain in limbo. Users on the PSLF Reddit page exchange words of encouragement to remain patient, as some celebrate being approved for student loan forgiveness.

Despite the questionable reliability of the program, if you believe that you’re eligible for PSLF, you should still apply. You can find the application link and more information about the PSLF program here.

An Unbearable Financial Burden for Many

With the rising cost of living in recent years, millions of Americans have unfortunately fallen behind on repayment. Nearly one-third of borrowers were delinquent (more than 90 days past due) in June. This comes after the Trump administration reinstated repayment after pandemic-era repayment freezes expired.

About 29% of borrowers — or 5.4 million people — were delinquent on their loans in June, meaning they haven’t made a payment in 90 days or more, according to new data from TransUnion.

What’s worse, those in default (more than 270 days late) are now experiencing wage garnishment from the federal government. Individual stories on Reddit indicate some have had their wages garnished since the repayment was enacted.

What You Can Do Going Forward

Despite the gloomy outlook for millions of borrowers, there are options available. Here are a few options to consider as you navigate the journey towards becoming student loan debt-free.

Consider Refinancing Your Student Debt

Refinancing student loans can help borrowers save money and simplify repayment. By combining multiple loans into one with a lower interest rate, you can reduce monthly payments and pay off debt faster. This is especially useful for those with high-interest loans or strong credit. Refinancing also offers more flexibility, like choosing shorter or longer repayment terms and fixed or variable rates.

Keep in mind that you will lose federal student loan protections. Additionally, this refinance process is a “one-way street.” Once you move your federal loans to a private lender, you aren’t able to go back. However, the potential interest rate savings and motivation to repay them may be worth considering.

What to Do If You’re In Default

Contact your loan servicer as soon as possible to explain your situation. They can help you explore solutions such as income-driven repayment plans, deferment, or forbearance, which can temporarily reduce or pause payments and stop garnishment. Acting quickly can prevent the situation from worsening and give you breathing room to regain control.

Even if garnishment has already started, there are steps you can take to protect yourself and stabilize your finances. Consider seeking guidance from a nonprofit credit counselor or a financial advisor familiar with student loans, personal loans, or debt consolidation—they can help you navigate repayment options, negotiate with your servicer, and create a realistic budget.

How I Escaped Student Loan Debt

I write about this subject with immense empathy in my heart. I graduated with $80,000 in student debt, with no clear path to pay it back. My student loans were private, so the onus was completely on me to figure it out. At its worst moments, I skipped meals and slept without the heater on during the winter. I swore to myself that I wouldn’t live that way forever.

Between job-hopping, various side hustles, refinancing my student loans multiple times, and a ton of grit, I was able to knock out my debt in just under eight years post-graduation.

So if you’re in the thick of it, don’t give up. If I can do it, so can you.