The National Postsecondary Student Aid Study (NPSAS) reports that graduates in the academic year 2007-2008 accumulated an average of $18,625 in loans. This excluded Parent Plus loans, which require a parent to be the primary borrower on the loan documents. The average, including only four-year institutions, jumps to $22,656, while the two-year program loan average drops to $12,307. Of all undergraduate students, 58.5 percent received education-related loans.
The federal Stafford Loan program disbursed 65.5 percent of all undergraduate student loans in the 2007-2008 academic year. According to the Federal Student Aid website, showing financial need is not a requirement to get subsidized loans and no interest accumulates while the student is in school or during grace and deferment periods. Unsubsidized loans do not require a student to show need, though interest accumulates from time of disbursement. The NPSAS states the average subsidized loan in 2007-2008 was $3,357 while unsubsidized was $3,248.
The NPSAS data on FinAid states the average overall student debt, combining both two- and four-year colleges, is $16,369 while private for-profit school students had an average debt of $17,162 and private non-profits had an average of $26,683. Eastern Mennonite University (EMU) reports that private colleges often have an abundance of grant and scholarship opportunities. Partly because of this, EMU claims its students graduate with "less debt than the national average."
Public-based student loans are, at least theoretically, a financial asset to the government. When a student pays back these loans in full, the government profits from the interest. The paradox here, as mentioned in a Congressional Budget Office (CBO) Report, is that the average student loan debt is paid back quicker when interest rates fall and slower when they rise. The CBO accounts for this factor when analyzing fair market assessments for securities investors. While the government likes to keep average student loan interest rates low, student borrowers are not likely to see zero percent interest specials such as those offered by car dealerships.
Having the potential to have substantial student loan debt upon graduating from college influences both the individual student and the overall economy. A graduate with loan debt raises his debt-to-income ratio, making it more difficult to get loans for things such as cars and homes. Student debt affects career and degree choices. Students are attracted to majors with "clearly associated job titles" and debt deters graduates from public service jobs, according to the California Research Bureau.