By Brittany Hackett, Communications Staff

Private student loan borrowing has dropped significantly among undergraduate students across all institution types in recent years, while federal student loan borrowing through the Stafford Loan Program has increased slightly, according to new data from the National Center for Education Statistics (NCES).

The data show that private student loan borrowing among undergraduates dropped by close to 50 percent between 2007-08 and 2012-11, falling from 14 percent to 6 percent. Borrowing through the Stafford Loan Program, meanwhile, increased from 35 percent to 40 percent within the same time period. Eleven percent of undergraduates took out both private and federal loans in 2011-12—down from 27 percent in 2007-08—and 86 percent took out only federal loans in 2011-12, compared to only 64 percent in 2007-08.

Borrowers also borrowed less in private loans in 2011-12 than in 2003-04, taking out an average of $5,800 compared to $7,000. The average amount borrowed in Stafford Loans, however, was about $1,000 more on average in 2011-12 than in 2007-08, increasing from $5,400 to $6,400. Among students who took out both kinds of loans, the average total amount borrowed in 2011-12 was $8,400, slightly less than in 2007-08 when the average amount was $8,700.

While private loan borrowing declined at all institution types, the decline was the largest among borrowers attending for-profit institutions, dropping from 41 percent in 2007-08 to just 12 percent in 2011-12. According to NCES, this drop in private loan borrowing coincided with a drop in the average tuition at for-profit institutions, which dropped from $22,400 in 2007-08 to $19,900 in 2011-12. Public two-year institutions showed the smallest decline in the same time period, dropping from 4 percent in 2007-08 to 2 percent in 2011-12. Seven percent of undergraduates at public four-year institutions took out private loans.

NCES also found a decline in the percentage of graduate students who took out private student loans between 2007-08 and 2011-12, though the average amount borrowed was not statistically different.

Publication Date: 12/2/2016