We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.
2023 High School Grads Could Take on $37K in College Debt
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Elizabeth Renter Senior Economist | Economics, Data analysis, Personal finance
As NerdWallet’s Senior Economist, Elizabeth Renter spends her time analyzing economic trends and data to help people make more informed decisions about their personal finances. Her work has been cited by The New York Times, The Washington Post, the "Today" show, CNBC and elsewhere. Prior to joining NerdWallet in 2014, she was a freelance journalist. She received a Masters of Science in Finance and Economics from West Texas A&M University, and focused her elective coursework on macroeconomics and analytics. When she’s not at work, Elizabeth enjoys college football, old houses, traveling to old cities and powerlifting. She is based in Durham, North Carolina.
Cecilia Clark Assistant Assigning Editor | Education financing products, Veteran's benefits, Student and graduate finances
Cecilia Clark is an editor on the loans team. She specializes in student loans and manages product reviews and roundups. Previously, she worked as a freelance writer and developed communications strategies for cybersecurity firms. Cecilia has also worked in post-secondary education, elevator operations management and sales and military nuclear command control, maintenance management and public affairs.
As millions of Americans with federal student loan debt hang in the balance, waiting to learn whether some of what they owe will be forgiven, the machine that has churned out this debt for decades is ready to welcome a new class of college students.
This year’s high school graduates could take on $37,300 in student loan debt in pursuit of a bachelor’s degree, according to NerdWallet analysis of data from the Department of Education. These graduates-turned-freshmen may not see alarming tuition increases, but any improvements won’t compensate for the doubling of higher education costs over the past 30 years.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.69-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 09/03/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Variable APR
5.59-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 09/03/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.59-15.49%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 9/24/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
5.54-15.70%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 9/24/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
Costs are down, but potential student loan debt is still excessive
The average tuition, fees, room and board at public four-year colleges was $23,250 in the 2022-2023 school year, down 5.4% from the year prior after adjusting for inflation, according to the latest data from the College Board. College costs have been growing more slowly for a decade now, and decreasing for the past few years.
These lower costs are reflected in how much students are borrowing. New college freshmen may take on less debt than those who began their college careers just a few years ago, but not by much.
Using the latest data available on college costs and average loans, 2023 high school graduates could borrow as much as $37,300 over a five-year undergraduate career. This is down slightly from 2022 graduates, who were looking at a possible $39,500 in student loan debt.
New student tip: Costs should always be a consideration in deciding whether or where to attend college, but finding those numbers can seem difficult. Colleges and universities should publish the cost of attendance on their websites. This number includes tuition, fees, room and board (meals), books and even some personal expenses. It doesn’t include financial aid. For that, look for the school’s net price calculator, and reach out to its financial aid office or an admissions counselor if you can’t find it. This will help you get a more precise estimate on how much you can expect to pay out of pocket at a school and makes comparing somewhat easier.
Repayment plans add thousands in interest
Students who borrow the maximum amount of federal student loan dollars — $31,000 for dependent undergraduates — would pay $387 in monthly payments on a 10-year repayment schedule. After 10 years, they’d wind up paying $46,453 including interest to whittle that debt down to zero. This is a modest payment estimate that assumes the current 4.99% interest rate throughout. However, that interest rate is expected to rise. While there are other repayment options available for federal student loans, the 10-year plan is considered the standard, and it generally results in the lowest total paid.
This analysis assumes the student is paying on unsubsidized loans. But the federal government also subsidizes some qualifying loans, meaning it covers the interest while the student is attending classes half time or more, potentially saving thousands of dollars.
New student tip: Students are not required to make payments on federal student loans while attending school and for a six-month grace period after. But if you’re taking on unsubsidized federal student loan debt while in school, you have the option of making interest-only payments during these periods. Because the interest is compounding, paying it as it accrues can save you considerably over the life of your loans.
Increased grant disbursements are a relief valve
If there’s good news, it’s that grant disbursements are up. Students may be able to lessen how much of their tuition bill is covered with borrowed money by qualifying for institutional, state and federal grants.
The largest source of federal grant aid, the Pell Grant, is no longer enough to cover all higher education costs of the most at-need students, but institutional grants have been picking up a greater share of total grant coverage in recent years. In fact, institutional grants now make up more of total undergraduate student aid than federal loans, a change that occurred in the 2019-2020 school year, according to College Board data.
New student tip: Grants are “free money” and don’t have to be repaid. Your best bet to get the maximum amount you’re entitled to is to fill out the Free Application for Federal Student Aid, or FAFSA, when it opens each year. Grants may be need-based, but they can also be awarded based on merit or even demographics. Like scholarships, every dollar of grant money you get is a dollar you don’t have to borrow and pay interest on.
Parents borrow to pick up where federal loans leave off
Because federal loans are capped at $31,000 for undergraduate students, those relying wholly on loans or attending more expensive institutions may need additional loans to cover their costs. Parents have been increasingly picking up this debt, which could impact their own long-term financial goals.
A 2021 NerdWallet survey found that 26% of parents who took out parent PLUS loans to help fund their child’s education would be “unable to retire as expected” because of the debt. One in 5 of parents with these loans regretted taking them out.
New student (and parent) tip: It’s tempting to help your child pay their school bill even when you don’t have the cash to do it. But if it involves borrowing, think twice. Unless you’re assured your child will graduate and support you in retirement, taking out loans to cover their education could do more harm than good. Paying for college often involves cobbling together money from multiple sources, but parent loans should remain a last resort.
Methodology
Projected college enrollment, the percentage of students who are awarded student loans and debt amounts for the high school class of 2023 were calculated using data from the National Center for Education Statistics.
These projections represent a conservative estimate as they focus on public, four-year institutions only. Private nonprofit and for-profit institutions generally have higher student loan award rates and higher loan amounts, on average, when compared with public institutions.
The average student loan amounts in the group analyzed grew 5.3% annually from 2000 to 2005, and 8% annually from 2005 to 2010. The change in loan amounts slowed dramatically from 2010 through 2020 to a rate of 1.3% year over year. This analysis assumes this continued conservative growth rate (1.3%) from the 2021-2022 school year on.
The analysis assumes a student who takes out student loans will borrow an average amount each year of their undergraduate career.
The calculations assume a five-year undergraduate career, based on estimates of the average time required to complete a bachelor’s degree from the National Student Clearinghouse.