For all the media coverage of the student loan crisis, the fact is that the majority of college students don’t take out loans to pay for college.
More than 70 percent of students who attended college this year did not use student loans to pay for school, according to a new report from Sallie Mae. Among those who did borrow, the vast majority used federal loans, which have better rates and more flexible repayment terms than private loans, which were used by just 8 percent of students.
The quarter of students who used federal loans to pay for college borrowed an average of $7,400, while the 8 percent who took out private loans borrowed an average of $9,000. (Six percent of students used both federal and private loans to pay for school this year)
In 12 percent of families, parents used loans to help pay for their children’s college, with the majority of parent borrowers using federal PLUS loans.
Source: Sallie Mae
Families who borrowed money to pay for college spent far more on college than those who didn’t. The average family with student debt spent nearly $30,000 on school-related expenses for the 2015-16 academic year, 55 percent more than families who did not use borrowed money.
The average amount borrowed fell by more than 9 percent to about $4,800 for the school year. The top source used to pay for higher education was scholarships and grants, covering more than a third of college costs.