Earning a college degree can expand opportunity and income potential, but for many Americans it also brings a long shadow: student loan debt. About 43 million borrowers in the United States collectively owe more than $1.7 trillion, more than what Americans carry in credit card balances or auto loans. The strain is not limited to recent graduates. Some borrowers are still making payments decades after they first stepped onto a campus.
A college education still matters. It can shape a career and raise lifetime earnings. Yet tuition has climbed faster than most families can comfortably manage, and too many students sign promissory notes without fully understanding what repayment will look like. This guide takes a clear look at how student loans fit into the broader debt picture, what repayment plans are available, and which relief programs may help borrowers steady their finances.
Total outstanding student loan debt now tops $1.7 trillion. The majority comes from federal student loans, including Direct Loans and Parent PLUS Loans. While millennials and Generation Z hold a large share of the balance, older borrowers are far from immune. Many are still paying for degrees earned years ago, or for loans they took out to help a child attend school.
Part of the pressure comes from today’s labor market. Advanced credentials are often expected, even in fields that do not always guarantee strong starting salaries. Law school, medical school, and many graduate programs require heavy borrowing up front. What is less discussed is how interest accrues, how monthly student loan payments are calculated, and how long the repayment period can stretch if income does not keep pace.
There are two primary types of student loans:
Understanding which type you have is critical. Federal student aid generally provides more flexibility. Borrowers may qualify for plans like the SAVE Plan, Income-Based Repayment, or Income-Contingent Repayment. These programs tie your monthly payment to your income and family size, which can make payments more manageable during lean years.
Student debt is no longer a niche concern. As higher education costs have risen, so has the average balance per borrower. Policy changes have not always kept up with the realities graduates face once they enter the workforce.
Some borrowers simply do not earn enough to cover their loan payments comfortably. Others experience setbacks such as disability, job loss, or increased living expenses. In certain cases, borrowers report confusion or inadequate assistance from their student loan servicers, leading to complaints filed with the Department of Education or the Consumer Financial Protection Bureau.
In June 2023, the Supreme Court struck down the Biden administration’s broad student debt relief proposal. Since then, attention has shifted to narrower forms of relief pursued through executive authority and existing programs. Options such as borrower defense to repayment, teacher loan forgiveness, loan rehabilitation, and Public Service Loan Forgiveness still provide structured paths toward debt cancellation for those who meet the eligibility requirements.
Income-driven repayment plans, such as SAVE, ICR, and IBR, are designed to reflect what you actually earn, not just what you owe. Your monthly payment is calculated using your income and family size. For many borrowers, that lowers the required payment and reduces the risk of falling behind. If you remain in the program for the full repayment period, usually 20 to 25 years, any remaining balance may be forgiven under current federal law.
The PSLF program applies to borrowers who work full time for a government agency or qualifying nonprofit organization. After 120 qualifying payments made under an eligible income-driven repayment plan, the remaining balance can be forgiven. Teachers, nurses, firefighters, and other public service employees often pursue this path, though the paperwork and certification requirements must be handled carefully along the way.
If a loan has gone into default, rehabilitation offers a structured way back. The borrower agrees to make a series of on-time payments, and once completed, the loan can return to good standing. Consolidation loans take a different approach. They combine multiple federal loans into one new loan with a single payment schedule, which can simplify repayment and reduce confusion about due dates.
Borrowers who cannot maintain employment because of a qualifying permanent disability may seek a Total and Permanent Disability discharge through the Department of Education. If approved, the remaining loan balance can be canceled.
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While student loan payments are a major source of stress, Americans also struggle with other types of debt:
The largest form of household debt in the U.S., mortgages can also become overwhelming. Missed monthly payments may qualify borrowers for deferment, loan modification, or refinancing.
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These loans can be costly, especially when interest rates are high. Many buyers underestimate the fees and loan terms, which leads to repayment challenges down the line.
More resources: What to do when behind on your car payments.
With high interest and minimal protections, credit card debt is a fast-growing issue. Strategies like the debt snowball (paying off smallest balances first) and debt avalanche (targeting high-interest debts) can help.
Learn more: Debt Repayment: Doing the Math
Repaying federal student loans is rarely simple, especially when balances feel far removed from what was borrowed for a valuable education. Some borrowers will fully repaid their loans through steady payments. Others may qualify to receive forgiveness through income based repayment, income contingent repayment, or other income driven repayment idr options.
If your balance feels immovable, do not assume debt relief is out of reach. Student loan debt relief strategies often require paperwork, patience, and careful follow-through, but they can provide meaningful benefits over time. For student loan borrowers with modest annual income relative to what they owe, an IDR plan can create a path toward long-term student loan debt forgiveness while keeping payments manageable along the way.
Still not sure where to go from here? No matter what type of debt you are in, our expert coaches are ready to help you find the debt solution that works for you. Contact us today to learn how you can achieve financial freedom.
Sources:
Federal Reserve Bank of New York
Board of Governors of the Federal Reserve System
