Education loans come in three major categories:
1. student loans (e.g. Stafford and Perkins loans)
2. loans to parents for children's education (e.g. PLUS loans)
3. private student loans (also called alternative student loans)
Few students can afford to pay for college without some form of education financing:
. 65.6% of four-year undergraduate students graduated with a Bachelor's degree and some debt in 2007-08
. the average student loan debt among graduating seniors was $23,186
. among graduating four-year undergraduate students who applied for federal student aid, 86.3% borrowed to pay for their education and the average cumulative debt was $24,651
. average cumulative debt increased by 5.6% or $1,139 a year since 2003-04
. 13.5% of parents borrow PLUS loans for their children's college education, with a cumulative PLUS loan debt of $23,298
Federal law sets the maximum interest rates and fees that lenders may charge for federally-guaranteed loans. Nothing prevents a lender from charging lower fees. Lenders sometimes offer student loan discounts.
(Research source FinAid.org) More statistical information at National Center for Education Statistics.
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