- More than 40 million Americans carry student loan debt
- 7 million of the borrowers are currently in default
- Defaulting on a student loan debt can result in the loss of a professional license in some states
- The average student loan balance is $25,000 or more
- Student loan debts are preventing borrowers from securing mortgage loans
The Types Of Loans
Student loans are either federal or private, meaning they are either backed by the government (federal) or by a financial institution (private).
The federal student loans are:
Perkins loan program — is a school-based program for up to $5,500 annually for undergraduate and up to $8,000 annually graduates students with extreme financial need.
Direct subsidized loans — eligible for up to $5,500 annually to undergraduate students that meet financial hardship criteria.
Direct unsubsidized loans –eligible for up to $20,500 annually to undergraduate, graduate, and professional school students and does not require financial hardship.
Direct PLUS loans — eligible for graduate or professional students and parents of dependent undergraduate students for expenses not covered by other sources of financial aid; annual award is maximum cost of tuition minus all other sources of financial aid.
Direct Consolidation loan — eligible to combine other federal student loans into a single loan.
The private student loans are alternative education loans and all terms and conditions are determined by the lender. Sallie Mae is the largest of the lenders with Citi Student and Wells Fargo not far behind. All of these lenders require a credit check and financial evaluation for loan approval. While this may sound like a more difficult route, most people find they are able to borrow more through a private lender. However, with that loan comes a massive repayment burden.