The Student Debt Crisis

Danielle Aiken

Editor in Chief

Student loan debt in the United States has soared to staggering levels, leaving millions of college students and recent graduates struggling to manage their finances and reasonably plan for the future.

As of mid-2025, total student loan debt in the U.S. has reached $1.8 trillion, a 4% increase from March earlier this year, according to the Education Data Initiative. Approximately 42.5 million borrowers collectively owe an average of about $40,000 each on their federal student loans, with private loans pushing statistics even higher.

For many students, debt is not just a number, but rather, a barrier to major life decisions. Nearly half of the millennial and gen z generations report delaying buying a home, getting married, or starting a family because of the burden of student loan payments.

The financial strain is especially hard on young adults ages 21 to 30, a group seeing a 35% rise in calls to nonprofit debt counseling organizations specifically in the past year.

In recent response, the Department of Education has restarted an Income-Based Repayment forgiveness program, which could help nearly 2 million borrowers get financial relief after making 300 qualifying payments.

In other words, if a borrower exhibits progress paying their dues, they could potentially receive financial forgiveness. 

Still, financial experts say more needs to be done to prevent student debt from derailing the futures of millions of college students.

The individuals who are really struggling, experts say, are the roughly 1 million borrowers who default on their student loans each year; which roughly translates into over 7 million borrowers in total at the end of 2024, according to the U.S. Education Department.

Defaulting “is not the only sign of struggle, but it’s the worst sign of struggle,” says Ben Miller, vice president for postsecondary education at the left-leaning Center for American Progress.

For students currently in college, experts recommend staying informed about repayment options, applying for scholarships and grants, and seeking financial advice early. 

You have to know your loans, and the first step is understanding what you owe.

“Many people don’t realize how many loans they have or what their interest rates are,” said Erin Lowry, author of the ‘Broke Millennial’ book series. “Start by logging into your loan servicer’s website and writing down every loan, the amount owed, the interest rate and the monthly payment.”

Borrowers with federal loans can find this information at StudentAid.gov.

Next, create a budget.

Once you know your monthly payment, build a budget that prioritizes loan repayment without sacrificing essentials like rent, groceries and emergency savings.

“Use the 50/30/20 rule as a starting point,” Lowry said. “Fifty percent of your income goes to needs, 30% to wants and 20% to savings or debt repayment.”

There are many free tools and apps. An example such as Mint, YNAB (You Need A Budget) and EveryDollar — that can help track spending and manage goals.

It is also crucial to understand loans and their forgiveness.

Federal loans generally accrue interest daily. Paying more than the minimum, even by $20 a month, can reduce the amount of interest you pay over time.

Financial literacy is an ongoing process. Free online resources, including the Consumer Financial Protection Bureau (CFPB), Federal Student Aid, nonprofit organizations, and Assumption University can help borrowers understand loan terms, budgeting and credit management.

Understanding the challenge is the first step to tackling it.