The Average American Has This Much Student-Loan Debt

As of the fourth quarter of 2016, Americans owed a total of $1.31 trillion in student-loan debt -- more than for auto loans ($1.16 trillion) or credit card debt ($779 billion). Since there are approximately 126 million households in the United States, this translates to an average of $10,397 in student-loan debt per household.

However, this doesn't tell the whole story, since fewer than 19% of households owe any money on student loans at all. The roughly 23.2 million households with student loans have an average outstanding debt of $49,905.

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The average American household's debt

According to NerdWallet's 2016 American Household Credit Card Debt Study, the average American household carried a total of $99,836 in debt as of the fourth quarter of 2016. However, keep in mind that this includes households with no debt at all. The average American household that has any type of debt owes a total of $134,643.

The four major types of debt, in order from greatest total amount to least, are mortgages, student loans, auto loans, and credit cards. Here's a rundown of how much the average American owes on each type of debt, and how many households have each type.

Data source: NerdWallet 2016 American Household Credit Card Debt Study. Calculations and chart by author.

The average American's student-loan debt

Keep in mind that these are the household debt statistics, and that many households have more than one student-loan borrower. According to a ValuePenguin report, which used data from the New York Federal Reserve, the average outstanding balance per student-loan borrower is $26,700.

In addition, Americans' outstanding student-loan debt is heavily weighted toward recent graduates, who have had to borrow more to keep up with rising tuition costs. According to the website Student Loan Hero, the average Class of 2016 graduate has $37,172 in student-loan debt, over $10,000 more than the average borrower.

Student-loan debt has ballooned in recent years, but is slowing down

It's no secret that student-loan debt has skyrocketed in recent years. In fact, the total has grown by 186% over the past decade alone.

However, it looks like the growth of student-loan debt may be finally starting to slow down. Although it grew by 6.3% in the most recent one-year period for which complete data is available, this is actually the slowest growth rate since NerdWallet began tracking student-loan debt in 2003. To put this into perspective, consider that from 2003 to 2010, U.S. student-loan debt grew at an average rate of 17.9% per year.

Is America's student-loan debt really worse than its credit card or auto-loan debt?

To be fair, comparing student loans to auto loans and credit cards isn't exactly an apples-to-apples comparison. In all honesty, I think Americans' $779 billion in credit card debt is somewhat worse than their $1.31 trillion in student loans.

For starters, student loans tend to have much lower interest rates than credit cards. My outstanding student loans average about 6% interest, while my credit cards average about 15%. It's 150% more expensive for me to borrow on my credit cards than it was to borrow for my education. This alone makes credit card debt much more dangerous, especially if it's carried for a long time. Plus, student-loan interest can be tax-deductible.

In addition, there are programs in place to make it easier for student-loan borrowers to pay their debt that simply don't exist with other forms of debt. Repayment options such as the Pay As You Earn program keep payments affordable for working graduates, and forgive any remaining balance after a certain amount of time. Last I checked, my mortgage and credit card lenders didn't offer similar programs (although that would certainly be nice).

There are also deferment and forbearance options for borrowers who are experiencing financial hardships. And there are forgiveness programs, such as the Teacher Loan Forgiveness program and the Public Service Loan Forgiveness program, which wipe any remaining debt away after a specified period of employment (five years of teaching, or a decade in certain public-service jobs).

To be clear, I'm not saying that American student-loan debt isn't too high, or isn't getting worrisome. I think ballooning student-debt levels are a problem that needs to be solved. Rather, I'm saying that when you read headlines like "Student debt is nearly twice the size of credit card debt," take them with a grain of salt. Credit card debt, especially, is a much more dangerous form of debt for most Americans to carry.

Will the student-debt "bubble" continue to grow?

Unless there's a serious change in the magnitude of available student-loan forgiveness programs, it's almost certain that student-loan debt will continue to grow. Inflation is a natural economic process, so college costs should rise over time, just not at the rates we've seen over the past few decades. And higher college costs will naturally translate into larger student loans.

The better question is: Will student debt grow at a healthy and sustainable pace, or will it balloon out of control and create a nationwide student-debt crisis, as many experts fear?