05/04/2009 - Private loans are being used more than ever to help fund college, according to a new study by the Project on Student Debt. But considering that private loans carry sky-high interest rates and inflexible repayment terms, that’s bad news.
The study found that 14% of undergrads used private loans last academic year (2007-08), up from 5% during 2003-04.
A quarter of students who took out private loans did not take out any federal loans, which carry much lower interest rates and more flexible terms. Worse, 14% didn’t even apply.
Every student is eligible for the unsubsidized Stafford loan, which provides $5,500 to $7,500 a year, depending on the student’s year in school. (Graduate students can get $20,500.)
Read the full article Student Loan Tips: How to Steer Clear of Private Loans on the New York Times' Web site.
Pew is no longer active in this line of work, but for more information, visit the Project on Student Debt Web site or visit the The Project on Student Debt on PewHealth.org.