Student loans are a form of financial aid that allows students to attend college. The money borrowed has to be repaid with interest. While student loans are the reason why millions of Americans are able to afford to go to college each year, the statistics on student loans can sometimes be alarming. With higher education tuition costs continuing to rise and families still feeling the effects of the recession, more students have been left to rely on student loans to fund their education than ever before because they can no longer look to their parents for financial support when it comes to paying for college. The following is some information on borrowers, debt information, and default rates associated with student loans in recent years.
- 66% of four-year undergraduate students have debt. For the 2007-2008 school year, more than two-thirds of undergraduate graduates finished school with some debt. The average for debt amongst those graduating seniors was $23,186, according to an article posted in FinAID and Student Loans.
- Student loans are now outweighing credit card debt. According to an article posted in Huffpost College, credit cards are no longer the largest source of debt for Americans. Based off of figures collected in July of 2010, Americans owe $826.5 billion in revolving credit, which is mostly credit card debt, while the amount owed in student loan debt surpassed that with a total of $829.8 billion.
- Student default rates have climbed to their highest level in ten years. Newly released data provided by the Education Department shows that default rates for students at for-profit schools has climbed to its highest level in more than 10 years. 15% of those students defaulted in their first two years of repayment on their student loans.
- Student loan debt outstanding totals at least $830 billion. As of June 2010, the outstanding student loan debt totaled at least $830 billion, with about $665 billion in federal education loans and $168 billion in private student loans. New federal student loan debt is expected to exceed $100 billion for the first time in 2011.
- Borrowers seeking private financial aid continue to increase at rapid rates. For the 2007-2008 school year, lenders provided about $17 billion in private loans for higher education learning. That amount is an increase of 592% from the amount of money private lenders provided for students a decade earlier.
- Up to 15% of your paycheck can be garnished for student loan repayment. Should students default on their student loans, up to 15% of their paycheck can be collected by State or Federal government as repayment for defaults. In addition, the Federal government can also garnish Social Security benefits, Federal interest benefits, or Federal income tax refunds to pay for defaulted student loans.
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