Use of Private Loans in Postsecondary Education

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A new report on postsecondary private loan borrows found that the percentage of undergraduates who took out private loans rose from 5 percent to 14 percent from 2003–04 to 2007–08.

The Expansion of Private Loans in Postsecondary Education, a Statistics in Brief, examines trends in borrowing from commercial lenders for postsecondary education, the characteristics of undergraduate and graduate private loan borrowers, and combining private and federal loans. Results are based on nationally representative data collected through the 2003–04 and 2007–08 National Postsecondary Student Aid Studies (NPSAS:04 and NPSAS:08). Other findings include:

• Among full-time dependent undergraduates, higher percentages of students from lower middle-income (21 percent) and upper middle-income (20 percent) families than students from low-income (15 percent) or high-income (16 percent) families borrowed private loans in 2007–08.

• The largest proportion of borrowers who took out private loans either exclusively or in combination with public loans (42 percent) was found among those enrolled at for-profit institutions in 2007–08.

• Among dependent private loan borrowers, 53 percent had also borrowed the maximum federal Stafford loan amount.