Student loan debt in the United States reached a record $1.7 trillion in 2025, affecting nearly 45 million Americans.
As tuition fees continue to rise, new graduates face long-term financial consequences, delaying homeownership, retirement savings, and career choices, according to data from the Federal Reserve and the U.S. Department of Education.
As of 2025, the average U.S. student loan borrower owes approximately $37,000, with some graduates carrying much larger debts. According to the U.S. Department of Education, student loan debt has nearly tripled in the past two decades, rising from $600 billion in 2005 to more than $1.7 trillion today.
This surge in debt has outpaced inflation and wage growth, leaving many graduates facing a prolonged period of financial uncertainty.
Data from the Federal Reserve shows that student loan debt affects major life decisions for young adults. Nearly 30% of borrowers say their debt has delayed their ability to purchase a home, while another 25% say it has prevented them from saving for retirement.
Additionally, many graduates report taking jobs outside of their field of study to help manage their loan payments, reflecting a broader trend of “underemployment,” according to a report from the Pew Research Center.
The financial strain also contributes to delayed milestones in personal and professional life. The combination of loan debt and rising living costs has left many graduates feeling financially unstable in their early career years.
In response to growing concerns, policymakers have begun to address the issue of student debt. The federal government has introduced loan forgiveness programs such as Public Service Loan Forgiveness (PSLF), which aims to alleviate debt for those working in public service jobs. However, these programs have faced criticism for their complexity and limited reach, as noted in reports from the Congressional Budget Office (CBO).
The Biden administration has proposed plans to expand income-driven repayment options and cancel a portion of federal student loan debt. According to the CBO, such measures could reduce student loan debt by as much as 20%, benefiting millions of borrowers.
The root of the student loan crisis lies in the skyrocketing cost of higher education. According to the College Board, the average cost of tuition and fees at public four-year colleges has increased by 130% over the past 20 years, outpacing inflation and wage growth.
While financial aid, including federal grants and scholarships, has grown, it has not kept pace with the increase in tuition fees, forcing many students to take on more debt to finance their education.
While the federal government and individual universities are taking steps to address the rising cost of education, experts warn that the student loan crisis will continue to affect graduates for decades to come. Without substantial reform to both college financing and student loan repayment systems, the economic burden on the next generation of graduates will remain a significant concern.
