Earning a college degree can open doors to a more secure financial future, but for many Americans, it comes with a long-lasting burden: student loan debt. Today, around 43 million student loan borrowers in the U.S. owe more than $1.7 trillion—surpassing both credit card and auto loan debt. The crisis affects not only recent graduates but also older borrowers still repaying loans decades after attending college.
While a valuable education is crucial for building a career, rising tuition costs and a lack of guidance have left millions seeking student loan debt relief. In this guide, we'll examine how student loans contribute to America’s debt crisis, explore available repayment plans, and highlight programs that can help borrowers regain financial control.
As of today, American student loan debt exceeds $1.7 trillion, most of which stems from federal student loans, including Direct Loans and Parent PLUS Loans. According to the Department of Education, a large percentage of this debt is held by millennials and Generation Z, but millions of older Americans also carry student loan burdens well into midlife.
This crisis is further complicated by the need for advanced degrees in today’s job market. High-cost fields like law, medicine, and even Master of Arts programs often require significant borrowing with no guarantee of high-paying employment after graduation. Many student loan borrowers don't fully understand the implications of their monthly student loan payments, interest rates, or how their loans fit into the broader repayment period.
There are two major categories of student loans:
Borrowers must understand how their loans are structured. Federal student aid typically provides more flexible repayment options, such as the SAVE Plan (Saving on a Valuable Education), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). These plans base your monthly payment on your income and family size, ensuring that struggling borrowers can manage payments more affordably.
Student debt now affects virtually every sector of the economy. As the cost of higher education continues to climb, so too does the average loan amount per borrower. Unfortunately, federal law has not kept pace with the evolving needs of today’s borrowers.
Many are unable to repay their loans because their annual income does not match their debt load. Others face life changes like disability, job loss, or rising living expenses. For some, student loan servicers have failed to provide adequate support, prompting complaints to the Department of Education or Consumer Financial Protection Bureau.
In June 2023, the Supreme Court blocked the Biden administration’s broad student debt relief plan, sparking renewed efforts to expand forgiveness programs through executive and legislative action. Meanwhile, targeted relief—such as borrower defense to repayment, teacher loan forgiveness, loan rehabilitation, and Public Service Loan Forgiveness (PSLF)—continues to offer pathways to debt cancellation for eligible borrowers.
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These plans, including SAVE, ICR, and IBR, adjust your monthly payment based on your income and family size. After a set repayment period—typically 20–25 years—any remaining loan balance may be forgiven under federal law.
For those working full-time in a nonprofit organization or government agency, the PSLF program offers loan forgiveness after 120 qualifying payments under a qualifying income-driven repayment plan. This includes teachers, nurses, firefighters, and other public service workers.
Borrowers in default can restore their loans through rehabilitation, which involves making a series of on-time payments. Alternatively, consolidation loans allow borrowers to combine multiple loans into a single loan with new terms, making repayment easier to manage.
Borrowers who are unable to work due to a qualifying permanent disability may be eligible for debt cancellation through the Department of Education.
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.
Get help: Foreclosure assistance is available
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.
Learn more: 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
Whether you’re seeking debt relief, trying to repay your student loans, or hoping to eventually receive forgiveness, understanding your options is essential. The federal government offers an array of tools and resources to support student loan borrowers, but too many people don’t know they exist.
If you’re overwhelmed by your student loan debt, know this: you’re not alone, and help is available. By exploring IDR plans, federal student aid options, and qualifying for loan forgiveness, you can build a brighter, more manageable financial future, one payment at a time.
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.
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