After reaching a peak of 14 percent in 2008, the number of undergraduates nationwide who used private student loans declined by roughly half by 2012, to 6 percent, according to a new data report from the U.S. Department of Education's National Center for Education Statistics. During the same time period, the percentage of undergraduates borrowing from the federal government through the Stafford Loan program increased to 40 percent from 35 percent.
"The decline in private education borrowing could potentially be attributed to a number of factors that include a tightening of lending standards; increases in the annual and aggregate unsubsidized Stafford Loan limits; a reduction in the number of private lenders in the education loan market; and the elimination of the Federal Family Education Loan Program, which made private lenders ineligible to make federal loans," the report said.
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