The average federal student loan balance is around $37,000 per borrower, but this varies widely by degree type, school, and when someone borrowed
The average amount of student loan debt depends on what you're measuring. If you're looking at people who actually borrowed money, the median federal student loan balance sits somewhere between $17,000 and $20,000. The $37,000 figure you often see includes only borrowers with outstanding loans — it excludes the millions of people who paid theirs off or never borrowed at all. Both numbers matter, but they answer different questions.
For homeowners or people considering homeownership, student loan debt matters because it affects your debt-to-income ratio, which lenders use to decide how much mortgage you can carry. A $37,000 student loan balance will reduce the amount a lender will approve you for, even if you're making payments on time. The impact depends on your monthly payment amount and your total income, not just the balance itself.
Key Takeaways
- The median federal student loan balance for borrowers is between $17,000 and $20,000, while the average (which includes higher balances) is around $37,000.
- Graduate degree holders carry significantly more debt than undergraduate borrowers — often $50,000 to $100,000 or more depending on the field.
- Student loan payments reduce the amount a mortgage lender will approve you for, so your monthly payment amount matters more than your total balance.
- Private student loans typically carry higher balances and interest rates than federal loans, and they're treated differently by mortgage lenders.
How debt varies by degree type and school
Someone who finished a four-year undergraduate degree at a public university typically carries less debt than someone who attended a private school or pursued graduate education. Public university graduates often graduate with balances in the $20,000 to $30,000 range, while private university graduates may owe $30,000 to $50,000 or more.
Graduate school borrowers — especially those in law, medicine, or business — routinely carry six-figure balances. A law school graduate might owe $100,000 to $150,000. Medical school debt often exceeds $200,000. These higher balances reflect both the cost of the programs and the fact that graduate students borrow more aggressively because they expect higher future earnings.
The school you attended and the program you chose matter more than the year you graduated. Someone who finished undergrad in 2010 might owe less than someone who finished in 2024, but a 2010 graduate with a master's degree might owe more than a 2024 undergraduate. The degree type and institution are stronger predictors than graduation year alone.
Federal versus private student loans
Federal student loans make up the majority of outstanding student debt in the United States. They carry fixed interest rates set by Congress, income-driven repayment options, and forgiveness programs. The average federal loan balance is lower than the average private loan balance because federal loans have borrowing caps — you can only borrow so much per year and in total as an undergraduate.
Private student loans have no federal caps and often carry variable interest rates. Borrowers who maxed out federal loans and still needed money often turned to private lenders. This means private loan balances tend to be higher, and the interest rates are often higher too. Private loans also lack income-driven repayment options and forgiveness programs, so they're stickier debt.
For mortgage purposes, lenders treat both types similarly — they count the monthly payment toward your debt-to-income ratio. But private loans with variable rates create more uncertainty in your future payments, which some lenders view as riskier.
What the numbers mean for your mortgage application
Mortgage lenders use your debt-to-income ratio to decide how much you can borrow. Most lenders want your total monthly debt payments — including the new mortgage — to be no more than 43% of your gross monthly income. Student loan payments are counted as debt, so a $37,000 balance with a $400 monthly payment reduces the mortgage amount you may have access to for.
The actual impact depends on your income and other debts. Someone earning $100,000 per year with a $400 student loan payment and a $300 car payment has $700 in monthly debt. That's 8.4% of gross income before the mortgage. They could theoretically carry a mortgage payment up to about $3,860 per month and stay under the 43% threshold. Someone earning $50,000 per year with the same debts has much less room.
If you're planning to buy a home in the next few years, paying down student loans before applying for a mortgage can increase your approval amount. Even paying off $5,000 to $10,000 can meaningfully change the monthly payment and free up borrowing capacity.
How income-driven repayment affects your numbers
Federal student loan borrowers can choose income-driven repayment plans, which calculate your payment based on your discretionary income rather than the loan balance. Someone with a $50,000 federal loan balance might pay $200 per month under an income-driven plan, or $500 per month under the standard 10-year plan. The balance is the same, but the payment is different.
Mortgage lenders use your actual monthly payment to calculate debt-to-income ratio, not the loan balance. This means switching to an income-driven plan before applying for a mortgage can lower your calculated debt and increase your mortgage approval amount. However, lenders verify your payment amount through your loan servicer, so you need to actually be on that plan when you apply.
The trade-off is that income-driven plans extend your repayment timeline and increase total interest paid. If you're using a lower payment to may have access to for a larger mortgage, you're essentially trading student loan interest for mortgage interest — which may or may not be the right financial move depending on your situation.
Regional and demographic differences in student debt
Student loan balances vary by region, partly because of differences in school costs and partly because of differences in income. Borrowers in high-cost-of-living areas often carry more debt because tuition is higher. Borrowers in regions with lower average incomes sometimes carry less debt because they borrowed less, or they carry more debt because they earn less and take longer to pay it off.
Age matters too. Borrowers in their 20s and early 30s typically carry higher balances because they're earlier in repayment. Borrowers in their 40s and 50s either paid their loans off or are carrying smaller balances. If you're a younger homebuyer, you're more likely to have student loan debt than an older buyer, and that debt will affect your mortgage qualification.
Frequently Asked Questions
Does paying off student loans before buying a house help me get approved for a bigger mortgage?
Yes. Lenders calculate your debt-to-income ratio based on your monthly payments, not your loan balance. Paying off $10,000 in student loans might reduce your monthly payment by $100 to $150, which can increase your mortgage approval by $20,000 to $30,000 or more. The impact depends on your income and other debts.
Will my student loan debt prevent me from getting a mortgage?
Student loan debt alone rarely disqualifies you from a mortgage. What matters is whether your total monthly debt payments fit within the lender's debt-to-income limits. If your income is high enough relative to your student loan payment, you'll still may have access to. If your payment is very high relative to your income, you may need to pay down the loan or increase your income before applying.
Are private student loans treated differently than federal loans by mortgage lenders?
Both are counted toward your debt-to-income ratio the same way. However, private loans with variable interest rates may be viewed as slightly riskier because your future payment could increase. Some lenders may ask for documentation of your current payment amount for private loans to verify it in their system.
What if I'm on an income-driven repayment plan with a very low payment?
Mortgage lenders use your actual current payment, which means a low income-driven payment will help your debt-to-income ratio. However, lenders verify the payment amount directly with your loan servicer, so you need to actually be enrolled in that plan when you apply. You can't claim a lower payment you're not actually making.
How much does student loan debt typically affect my mortgage approval amount?
The impact varies, but a rough estimate: every $100 in monthly student loan payment reduces your mortgage approval by about $20,000 to $25,000, depending on interest rates and your income level. Someone with a $400 monthly student loan payment might see their mortgage approval reduced by $80,000 to $100,000 compared to someone with no student debt and the same income.