5 Private Student Loan Statistics | 08.06.12

Posted in Financial Aid, PLUS Loans, Private Student Loans, Stafford Loan, Student Loans By Student Loan Network Staff

Student loans have been all over the news in the past year, and borrowers are researching college financing options more than ever. In light of this, it’s important to know the facts so you can make better-informed decisions about paying for college.

  1. 90% of private loans require school certification
  2. Schools must approve a loan based on the student’s cost of attendance. This ensures that borrowers aren’t taking out more than they need, keeping them out of further debt.

  3. More than 90% of approved applicants applied with a cosigner
  4. Because many students have little to no history, most loans will require a credit-worthy cosigner to be approved. The good news is that cosigner release is now common among private loan lenders, allowing the cosigner to be released from obligation after a certain number of on-time monthly payments.

  5. Private student loans make up less than 15% of outstanding student loan debt
  6. With all the news about student loans flooding the media, it’s important to keep things in perspective. The vast majority of outstanding debt is made up of federal loans, which tend to have more allowances and repayment options for borrowers.

  7. The average private loan interest rate in 2011 was about 8%
  8. Interest Rates by Origination Quarter

    Federal Stafford loan interest rates are 3.4% and 6.8% for subsidized and unsubsidized loans respectively. Federal PLUS loan rates are even higher at 7.9%. Private loans aren’t much different, with an 8% average. The minimum rate on variable rate loans has been just above 2% for the past couple of years, making private loans an affordable option for some borrowers.

  9. More than 40% of PSL borrowers fail to exhaust their Stafford Loans
  10. Private loans are a great option to help fill the gap after federal student aid has been maxed out. However, some students still do not exhaust their federal aid. Federal aid has a lot of great benefits that many private loans don’t offer, including a variety of repayment options and benefits. While private loans are a helpful way to fill the gap, make sure to look into all federal options before applying.

Source: Private Student Loans Report, Consumer Financial Protection Bureau

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4 Responses to “5 Private Student Loan Statistics”

  1. Leonard Duba says on September 20, 2012 at 10:14 am:

    Gee, no free abortion? Then I’ll go with the Communist Dictator! And we wonder why this country is in the toilet. Same kind of thinking will cause almost 100% of blacks to vote for him even though he has done more damage to their cause than George Wallace.

    Reply To This Comment
  2. Michael says on August 29, 2012 at 2:58 pm:

    please,how do I get the financial support? I really need to fund my medical career.Thanks

    Reply To This Comment
  3. Chad Shulman says on August 13, 2012 at 1:23 pm:

    Your 2nd point ‘hit home’ out of all the others on this list. Question: Once the cosigner is released from obligation, is that a permanent status? Meaning… if payments aren’t being made at some point in the future, does the cosigner lose that status?

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