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Read original →Degree on Credit
How student loans work in the US and Russia: debt volumes, interest rates, tuition costs, and repayment terms. An analysis of American and Russian models for financing higher education.
How the U.S. System Works
American higher education is funded from several sources simultaneously: students' and families' own resources, university and government grants, as well as student loans. If grants and personal funds aren't sufficient, students can cover the remaining tuition costs with loans. In recent years, debt burden has become a significant part of the American system: in the second quarter of 2026, total student debt reached $1.65 trillion, with approximately 42.6 million borrowers in the federal student loan system.
In the 2025/26 academic year, the published cost of one year at a public four-year institution averaged $11,950 (~1 million rubles) for in-state residents, and $31,880 (~2.76 million rubles) for out-of-state students. At private nonprofit universities, it was $45,000 (~3.9 million rubles).
If personal funds and grants aren't enough, the remaining amount can be financed through loans. Federal student loans have fixed rates that depend on the borrower category and academic year. For undergraduate students in the 2026/27 academic year, the rate is 6.39% annually. For graduate students and professional programs, it's 7.94%, and for PLUS loans, 8.94%. Repayment terms depend on the program: the standard federal plan typically requires repayment over 10 years, while certain programs allow payments to be stretched over a longer period.
It's precisely this combination of high education costs and loan financing that creates accumulated debt. In the 2023/24 academic year, 47% of bachelor's degree graduates had debt. The average debt among borrowers was $29,560.
Meanwhile, the cost of education itself has grown unevenly over the past decade. In real terms, from the 2015/16 to 2025/26 academic year, tuition at public two-year colleges decreased by 10%, at public four-year institutions for in-state residents by 7%. At private nonprofit four-year universities, costs increased by 2%.
