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| Student Loans |  An education loan is a type of financial aid that must be repaid, with interest. There are four main types of education loans: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans), private student loans (also known as alternative student loans) and consolidation loan, which lets the borrower to consolidate all of his/her loans into one loan for simplified payment.
Federal law establishes the maximum interest rates and fees that lenders may require for federally-guaranteed loans. Lenders are not prevented from charging lower fees. Many lenders promise a variety of student loan discounts to have more borrowers.
Few students can afford to pay for college education themselves without any financial aid. Two-thirds (65.7%) of 4-year undergraduate students graduate with some debt, and the average student loan debt among graduating seniors is $19,237 (excluding PLUS Loans but including Stafford and Perkins). The medium borrowed amount is $17,120. One quarter of undergraduate students borrow $24,936 or more, and one tenth borrow $35,213 or more. For federal student loan debt (excluding PLUS Loans), the figures are 62.2% and $17,036. Average cumulative debt increases by about 3% or nearly $550 a year. The medium cumulative debt with PLUS loans included is $21,899. (Nearly one in ten (10.8%) parents borrow PLUS loans for their children's college education, with a cumulative PLUS loan debt of $16,317.)
The following table shows the percentage of students borrowing and average cumulative debt (excluding PLUS Loans) according to type of educational institution.
Undergraduate Education Debt
| Institution Level & Control | Percent Borrowing | Cumulative Debt | | Overall Total (4, 2 and < 2 year) | 55.5% | $15,766 | | 4-year Total | 65.6% | $19,202 | | 4-year Public | 61.7% | $17,277 | | 4-year Private Non-Profit | 72.8% | $21,957 | | 4-year Private For-Profit | 87.3% | $28,138
| | 2-year Total | 37.4% | $9,897
| | 2-year Public | 33.2% | $9,387
| | 2-year Private Non-Profit | 69.1% | $12,326
| | 2-year Private For-Profit | 90.0% | $12,107 | | < 2-year Total | 67.1% | $7,271 | | < 2-year Public | 34.0% | $7,243 | | < 2-year Private Non-Profit | 26.5% | $4,854 | | < 2-year Private For-Profit | 77.3% | $7,311 |
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