Study Finds Sharp Increase in Private Student Loans

April 22, 2009

An analysis of new Education Department data provides additional evidence that students' use of more expensive private loans is rising sharply. The study, from the Project on Student Debt, finds that the proportion of undergraduates who held private student loans jumped to 14 percent in 2007-8 from just 5 percent in 2003-4, according to data from the federal government's National Postsecondary Student Aid Study. Of the 2007-8 private loan borrowers, a full 26 percent did not take out any federal student loans, up four percentage points from 2003-4, and 14 percent of them did not apply for federal financial aid. The group's survey found that private loan borrowers were disproportionately represented at the more expensive for-profit and four-year nonprofit colleges.

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