Office of Planning and Budgeting

As Expected, Federal Loan Borrowing Has Increased

The US Department of Education’s Stats in Brief from October 2011 entitled “Borrowing at the Maximum” investigates the percentage and demographics of students who take out federal subsidized and unsubsidized Stafford loans, and how this has changed over time. The report also seeks to differentiate between those who take out the program maximum loan amount and those who take out their personal maximum amount (adjusted for their financial need and the cost of their education). Some interesting findings include:

  • the proportion of borrowers has increased significantly over time, from 27 percent of students receiving federal Stafford loans averaging $7,200 (inflation adjusted) in 1989/90, to 46 percent borrowing an average of $10,300 by 2007/08.
  • 43 percent of those borrowing in 2007-08 took out the program maximum Stafford loan amount, while 60 percent took out their personal maximum amount (which can equal the maximum amount for some).
  • 30 percent of those taking out Stafford loans also took out private loans, whereas only six percent of students not taking out federal loans did. Furthermore, 16-18 percent of the parents of those students borrowing through the Stafford program also took out Parents PLUS loans.
  • Students taking out Stafford loans to help finance their education were less likely to have full-time jobs.
  • 73 percent of students who took out Stafford loans also received grants.

To read more about the findings or methodology of this report, check out the full report here.

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