Federal loans are available to graduate and professional students with an interest rate of 8.08%; parents can borrow PLUS* loans at 9.08%. 90.79% of all student loan debt is federal; the remaining 9.21% is private loan debt. Private student loans, including refinance** loans, start as low as 3.45%.
Most lenders that originate student loans are large institutions, such as large banks or the federal government.
Overview of Student Loan Ownership
Federal student loans are typically owned by the U.S. Department of Education (DOE), while private student loans are owned by the private lender who issued them. However, both the DOE and private lenders may partner with a third party known as a loan servicer to manage your loans.
Overall, only 1% of all U.S. adults owed at least $100,000. Young college graduates with student loans are more likely than those without this kind of debt to say they struggle financially.
Most student loans — about 92.4% — are owned by the government. Total federal student loan borrowers: 42.7 million. Total outstanding federal student loan debt: $1.64 trillion.
The same principle applies to student loans. In the case of student loans, the student is responsible for repaying the debt — whether they graduated or not. The only exception to this rule are parent PLUS loans, in which the parent — not the student — is responsible for that debt.
The FCRA accounting method says that federal loans make money for the government, while the fair-value method says they cost taxpayers money. In the most recent analysis by the Congressional Budget Office (CBO), FCRA shows a profit of $135 billion over 10 years, whereas fair-value shows a cost of $88 billion.
Black adults are more than twice as likely than white adults to have student loan debt. The following graph includes federal and private student loan debt among all adults. On average, Black adults in the U.S. also hold higher student loan debt balances than borrowers of other races.
The federal government began guaranteeing student loans provided by banks and non-profit lenders in 1965, creating the program that is now called the Federal Family Education Loan (FFEL) program.
Higher percentages of Black (88 percent) and American Indian/Alaska Native (87 percent) students received grants than students who were of Two or more races (79 percent), White (74 percent), and Asian (66 percent).
Your interest charges will be added to the amount you owe, causing your loan to grow over time. This can occur if you are in a deferment for an unsubsidized loan or if you have an income-based repayment (IBR) plan and your payments are not large enough to cover the monthly accruing interest.
Generally, there are two types of student loans—federal and private. Federal student loans and federal parent loans: These loans are funded by the federal government. Private student loans: These loans are nonfederal loans, made by a lender such as a bank, credit union, state agency, or a school.
The average debt for a 4-year Bachelor's degree is $35,530. The average 4-year Bachelor's degree debt from a public college is $31,960. 61% of students who completed a Bachelor's degree have received student loans. The average 4-year Bachelor's degree debt from a private for-profit college is $47,730.
If you pass away with federal student loans, the debt won't be passed on to anyone else, not even your spouse or parents. The loan servicer will discharge your federal student loan, as well as any Parent PLUS loans taken out in your name, upon receiving proper documentation of your death.
Parent PLUS loans can potentially be forgiven after 10 years under specific conditions, such as through the Public Service Loan Forgiveness (PSLF) program after consolidation into a direct consolidation loan. Parent borrowers must enroll in the Income-Contingent Repayment (ICR) plan to qualify for PSLF.
The student is responsible for the repayment. If a parent cosigns the loan -- common for private student loans -- the parent will also be responsible for repayment. Parent loans often have a higher interest rate than federal student loans. They have less flexible payment terms, and they require a credit check.
Students and parents borrowed an estimated $98.2 billion in the 2022-23 academic year. 44% of this was federal unsubsidized loans, 16% was federal subsidized loans, 15% was private or other nonfederal loans, 14% was Grad PLUS loans and 11% was Parent PLUS loans.
Trend Generator. Financial Aid: What is the percent of undergraduate students awarded federal student loans? In year 2022-23, the percent of undergraduate students receiving federal student loans was 28.6%. This is based on 5,423 institutions.
Sallie Mae is not a federal loan servicer.
When Sallie Mae first formed, it was a government-sponsored enterprise servicing federal student loans — or loans made by the government. But in 2014, it split into two separate companies.
Carrying student debt can affect your ability to buy a home if your debt-to-income ratio is too high. If you have too much student loan debt, you won't be able to save as much for retirement. Student loan debt can lower your credit score, especially if you fail to make on-time payments.
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
The average federal student loan debt held as of the fourth quarter of 2024 is $38,375. Black Americans hold an average (median) of $26,000 in student loan debt, while white Americans have $25,000. Sixteen percent of Americans with student loans are behind on their payments.