Q&A: what you need to know about America's student debt crisis

What is student debt?

Going to university in the US is expensive – costing an average of over $34,000 a year in tuition and fees at private universities – which means for most Americans, the only way of viably pursuing higher education is to take out a student loan.

The figures are staggering. An estimated 45 million Americans have student loans, contributing to an overall national student debt of $1.6tn.

What student loans are available?

The two main options for prospective students are a government-funded federal loan or a private loan from a provider such as a bank, university or state agency. Both are paid back with interest (interest on federal loans is fixed and normally lower than on private loans, which can be expensive and risky and comprise just 14% of student loans).

Federal loans come in various forms – including direct subsidized, direct unsubsidized and direct plus for graduates and professionals. There’s also Direct Plus for parents, where, as the name suggests, the student’s guardians take the full burden.

Depending on year and dependency status, undergrads can borrow between $5,500 and $12,500 a year in federal loans; professionals and graduate students have access to up to $20,500 a year. Federal loan repayments are monthly and start six months after graduation – usually continuing for 10-25 years.

Related: Bernie Sanders unveils plan to eliminate $1.6tn in student loan debt

How much is the average student debt in the US?

The class of 2017 left college with an average of $28,650 each in debt, according to a report by the Institute for College Access and Success (Ticas). This is a huge rise compared with the equivalent figure for just two decades ago. In 1996, the average debt of four-year students was less than half of that, at $12,750, the not-for-profit higher education organization found.

How does US student debt compare to other countries?

At an average of $37,000, student debt in America is high, but it is higher in the UK where the average is $55,o00, according to analysis by YaleGlobal.

In stark contrast, students in Germany can expect to pay $2,200 for an undergraduate degree and come away with an average of $2,400 in debt.

Surprisingly, despite free tuition, graduates in Sweden leave university with an average of about $20,000 in debt.

Who is most affected by student debt?

Around two thirds of graduates from both public and private not-for-profit colleges have student loans. But at $31,450, the average for private not-for-profit college is higher than that of a public college, whose average is $26,900, Ticas found. Meanwhile, 83% of graduates of for-profit institutions have loans (average value: $39,900).

Debt varies between states. Connecticut has the highest average student debt at $38,510 for the class of 2017, according to Ticas, and Utah had the lowest with $18,838.

Race is a huge factor. Black students owe an average of $7,400 more than white students when they graduate, the Brookings Institution found. After graduation, the debt gap continues to widen. Four years after graduation, black graduates owe an average of nearly $53,000 – nearly double that of white graduates.

What are the Democratic 2020 candidates proposing?

Student debt looks set to be one of the defining issues of the 2020 election among Democrats.

So far, Bernie Sanders has announced the most radical plan, with a promise to wipe out the undergraduate and graduate debt of all Americans. He plans to pay the $1.6tn cost with a new tax on Wall Street.

Elizabeth Warren has pledged to cancel the student debt of over 95% of Americans, which she plans to finance with a tax on the wealthiest 0.1%.

Joe Biden has previously shown support for free higher education, but so far the only specific detail his 2020 campaign has offered on the issue has been to talk about the Public Service Loan Forgiveness Program, which he wants to see “fixed” to help teachers.

Pete Buttigieg, who himself has $130,0oo in student debt, has pledged to make public college “debt-free” for lower income families and “zero tuition” for middle income families.

Kamala Harris has said she would make college debt-free for future students and provide relief for those who already have student loans.

What is the Trump administration proposing?

In March, Donald Trump vowed to “fix” student loan debt when he signed an executive order to publish graduate income and debt of individual colleges according to subject and to create policy proposals that would make colleges accountable for student results.

The White House has also said it wants to cap student loan borrowing.