Finance
Student loan debt has increased by 430% since 2003 – here’s how to lower your debt
In the last 20 years, student loan debt levels have risen by 430%. (iStock )
National debts have increased by a substantial amount in the last 20 years, but none by as much as student loans. Since 2003, student loan debt has increased by 430%, according to a study by the Kaplan Group. Although student loan debts have stabilized in the last few years, levels remain staggeringly high.
Debt in general grew by 81.5% during the same time period. Student loans led the pack, followed by auto loans, which grew by 91% in 20 years. Mortgages followed close behind, rising by 80% since 2003. Credit card debt also grew, but not by nearly as much as other debts at 33%.
Certain states saw larger increases in debt than others. Washington, D.C. struggled most with rising debt levels, with many residents reporting more than $100,000 in debt. Hawaii residents also have high levels of debt, averaging nearly $83,000 for many residents.
Washington state residents have a similar $82,000 in debt, on average. The states with the lowest levels of debt per resident were West Virginia, Mississippi and Arkansas.
Individually, mortgage debt still remains the main debt that most households have, typically representing three-quarters of an individual or family’s debt. After mortgages, student loans and auto loans are nearly tied.
If you have private student loans, federal relief doesn’t apply to you. If you’re looking to lower monthly payments and ease the burden of student loan debt, consider refinancing your student loans via the online marketplace Credible.
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Federal court blocks what’s left of Biden’s student debt relief plan
President Biden has been instituting forgiveness and debt relief for student loan borrowers since he took office. However, an appeals court recently blocked all aspects of Biden’s SAVE plan. This plan intended to lower monthly payments for millions of borrowers while ultimately providing complete forgiveness after a certain number of payments had been made.
“It wasn’t so long ago that a million borrowers defaulted on their student loans every single year, mainly because they couldn’t afford the payments,” U.S. Secretary of Education Miguel Cardona said in a statement. “The SAVE plan is a bold and urgently needed effort to fix what’s broken in our student loan system and make financing a higher education more affordable in this country. The Biden-Harris Administration remains committed to delivering as much relief as possible for as many borrowers as possible.”
The 8th Circuit Cour of Appeals officially granted an administrative stay, a motion originally filed by a group of Republican-led states. The order prohibits the Biden administration from implementing parts of the SAVE plan that weren’t already blocked by other court rulings.
“Borrowers enrolled in the SAVE Plan will be placed in an interest-free forbearance while our administration continues to vigorously defend the SAVE Plan in court,” Cardona said. “The Department will be providing regular updates to borrowers affected by these rulings in the coming days.”
If you’re considering refinancing to lower your monthly student loan payments, make sure to compare rates before you apply, so you can make sure you find the best deal for you. Credible can walk you through the refinancing process and help you find your best rate options.
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Ways to reduce student loan debt
Aside from mortgages, student loans are one of the biggest debts the average American holds. Lowering those debts can be a huge relief financially. There are a few steps borrowers can take to potentially drop their monthly student loan payments:
- Switch to a different repayment plan: There are a variety of different repayment plan options, so borrowers should explore alternative repayment plans that may better align with their financial situations. Income-driven repayment plans can adjust monthly payments based on income and family size, potentially providing relief.
- Think about deferment or forbearance: Deferment and forbearance provide relief when borrowers are experiencing financial hardship, job loss or other significant life events. These options allow for a temporary pause on payments or reduced monthly payments. However, interest may continue to accrue on loans.
- Look into forgiveness options: Although the SAVE Plan is currently paused for many, there are other loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness. These programs eliminate a borrower’s remaining balance after they’ve made a certain number of qualifying payments while working in specific public service roles.
- ·Get a rate decrease with auto debit: Many lenders offer an interest rate discount, often 0.25%, for enrolling in automatic payments. This reduces the amount a borrower will pay over the life of the loan.
- Refinance or consolidate: Borrowers who can qualify for a student loan refinance at a lower rate can save on interest payments. Using a student loan marketplace like Credible can help borrowers compare student loan refinancing rates from multiple private lenders at once.
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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
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For the generation that should be in its “peak savings years,” the prospect of retiring on time has shifted from a plan to a prayer.
A newly released Employee Financial Wellness Survey by PwC found that nearly 50% of Gen X employees are pushing back their retirement dates, citing stagnant wages, rising everyday costs, and a lack of liquid savings.
Additionally, only 38% of Gen Xers believe they can retire when they originally planned, and more than half of this demographic expect to withdraw funds from their retirement accounts early to cover short-term costs.
“For employers, this isn’t a future problem. Financial anxiety during peak career years can affect focus and engagement,” PwC researchers write. “If the risks are clear, the question is why more employees aren’t taking action. It’s not a lack of desire. Most employees want stability, confidence and to feel in control. But many don’t feel equipped to get there.”
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The primary driver of this retirement delay is the inability to save as inflation eats away at monthly expenses, the report notes. Twenty-five percent of the total workforce is living without a buffer, and nearly half cannot meet basic household expenses.
Nearly half of Gen X workers are delaying retirement, PwC reports. (Getty Images)
“[Forty-nine percent] say their compensation isn’t keeping up with costs. As expenses rise faster than income, day-to-day trade-offs are becoming routine. Employees aren’t just feeling squeezed. They’re making difficult financial decisions to stay afloat,” the PwC report continues..
As a result, when Gen Xers cannot afford to leave their current jobs, the entire corporate ladder stalls, creating business risks, with companies facing higher costs as older talent remains on payroll longer than expected.
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“When employees dip into retirement funds early or delay retirement altogether, it affects more than personal finances and retirement plan leakage,” the report says. “It may also influence workforce planning, healthcare costs, succession timing and overall organizational stability.”
The findings also show that a significant portion – 41% – of the workforce feel they were never given the tools to manage a crisis of this magnitude, leading to a sense of being “overwhelmed” by financial choices.
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PwC provided a call to action for employees and their employers, encouraging them to reduce the stigma around financial education, foster trust through human coaches, emphasize skill building and focus on day-to-day finances before long-term goals.
“Employees define financial wellness simply: less stress, fewer surprises and the freedom to make financial choices with confidence. For employers, that’s the opportunity.”
Cybersecurity and enterprise software stocks have been market dogs in 2026, with fears that AI will wipe out a wide range of companies in the enterprise space dominating the narrative. But they snapped a brutal losing streak this past week, joining in the broader market rally that saw all losses from the U.S.-Iran war regained by the Dow Jones Industrial Average and S&P 500.
Cybersecurity has been “a victim of some of the AI-related headlines,” Christian Magoon, Amplify ETFs CEO, said on this week’s “ETF Edge.”
It wasn’t just niche cybersecurity names. Take Microsoft, for example, which was recently down close to 20% for the year. Its shares surged last week by 13%.
A big driver of the pummeling in software stocks was a rotation within tech by investors to AI infrastructure and semiconductors and some other names in large-cap tech, Magoon said, and since cybersecurity stocks and ETFs are heavily weighted towards software companies, they were left behind even as those businesses continue to grow on a fundamental basis.
But Wall Street now has become more bullish with the stocks at lower levels. Brent Thill, Jefferies tech analyst, said last week that the worst may be over for software stocks. “I think that this concept that software is dead, and then Anthropic and OpenAI are going to kill the entire industry, is just over-exaggerated,” he said on CNBC’s “Money Movers” on Wednesday.
“Big Short” investor Michael Burry wrote in a Substack post on Wednesday that he is becoming bullish about software stocks after the recent selloff. “Software stocks remain interesting because of accelerated extreme declines last week arising from a reflexive positive feedback loop between falling software stocks and changes in the market for their bank debt,” he wrote.
The Global X Cybersecurity ETF (BUG), is down about 12% since the beginning of the year, with top holdings including Palo Alto Networks, Fortinet, Akamai Technologies and CrowdStrike. But BUG was up 12% last week. The First Trust NASDAQ Cybersecurity ETF (CIBR) is down 6% for the year, but up 9% in the past week.
Piper Sandler analyst Rob Owens reiterated an “overweight” rating on Palo Alto Networks which helped the stock pop 7% — it is now down roughly 6% on the year. Its peers saw similar moves, including CrowdStrike.
Performance of Global X cybersecurity ETF versus S&P 500 over past one-year period.
Magoon said expectations may have become too high in cybersecurity, and with a crowding effect among investors, solid results were not enough to to push stocks higher. But the down-and-then-back-up 2026 for the sector is also a reminder that when stocks fall sharply in a short period of time, opportunity may knock.
“Once you’re down over 10% in some of these subsectors, you start to see the contrarians start to say, ‘well, maybe I’ll take a look at this,'” Magoon said.
He said AI does add both opportunity and uncertainty to the cybersecurity equation, increasing demand but also introducing new competition. But he added, “I think the dip is good to buy in an AI-driven world,” specifically because the risks to companies may lead to more M&A in cyber names that benefits the stocks.
For now, investors may look for opportunity on the margins rather than rush back into beaten-up tech names. “I think investors are still going to remain underweight software,” Thill said.
But Magoon advises investors to at least take the reminder to keep an eye on niches in the market during pronounced downturns. “The best-performing are often the least bought and do the best over the next 12 months versus late-in-the-game piling on,” he said.
While that may have been a mindset that worked against the last investors into cybersecurity and enterprise software in mid-2025 when the negative sentiment started building, at least for now, it’s started working for the stocks in the sector again.
Meanwhile, this year’s biggest winner is also a good example of what can be an extended trade in either a bullish or bearish direction. Last year, institutional ownership of energy was at multi-year lows, Magoon said, referencing Bank of America data. “Reverse sentiment can be a great indicator,” he said.
But he cautioned that any selective buying of stocks that have dipped does have to contend with the risk that there is a potentially bigger drawdown in the market yet to come in 2026. That is because midterm election years historically have been marked by large drawdowns. “If you think it is bad right now, it could get a lot worse,” Magoon said. But he added that there’s a silver-lining in that data, too, for the patient investor. The market has posted very strong 12-month returns after midterm election drawdowns end. So, for investors with a longer-term time horizon and no need for short-term liquidity, Magoon said, “stick in there.”
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New innovation in the exchange-traded fund industry could come at a cost to investors during extreme conditions.
According to MFS Investment Management’s Jamie Harrison, ETFs involved in increasingly complex derivatives and less transparent markets may be in uncharted territory when it comes to violent downturns.
“Those would be something that you’d want to keep an eye on as volatility ramps up,” the firm’s head of ETF capital markets told CNBC’s “ETF Edge” this week. “As innovation continues to increase at a rapid pace within the ETF wrapper, [it’s] definitely something that we advise our clients to be really front-footed about… Lack of transparency could absolutely be an issue if we’re going to start seeing some deep sell-offs.”
His firm has been around since 1924 and is known for inventing the open-end mutual fund. Last year, ETF.com named MFS Investment Management as the best new ETF issuer.
“It’s important to do due diligence on the portfolio,” he said. “Having a firm that has deep partnerships, deep bench of subject matter experts that plays with the A-team in terms of the Street and liquidity providers available [are] super important.”
Liquidity as the real issue?
Harrison suggested the real issue is liquidity, particularly during a steep sell-off.
“We’ve all seen the news and the headlines around potential private credit ETFs. That picture becomes much more murky,” he added. “It’s up to advisors, to investors [and] to clients to really dig in and look under the hood and engage with their issuers.”
He noted investors will have to ask some tough questions.
“What does this look like in a 20% drawdown? How does this liquidity facility work? Am I going to be able to get in? Am I going to be able to get out? And if I’m able to get out, am I able to get out at a price that’s tight to NAV [net asset value], and what’s the infrastructure at your shop in terms of managing that consideration for me,” said Harrison.
Amplify ETFs’ Christian Magoon is also concerned about these newer ETF strategies could weather a monster drawdown. He listed private credit as a red flag.
“If your ETF owns private credit, I think it’s worth taking a look at, kind of what the standards are around liquidity and how that ETF is trading, because that should be a bit of a mismatch between the trading pace of ETFs and the underlying asset,” the firm’s CEO said in the same interview.
Magoon also highlighted potential issues surrounding equity-linked notes. The notes provide fixed income security while offering potentially higher returns linked to stocks or equity indexes.
“Those could potentially be in stress due to redemptions and the underlying credit risk. That’s another kind of unique derivative,” Magoon said. “I would very closely look at any ETF that has equity-linked notes should we get into a major drawdown or there be a contagion in private credit or something related to the banking system.”
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