Here is the Wall Street Journal article that provided these figures from the Department of Education. This growth was ahead of figures provided at end of February by the Department, which showed 20.8% growth in federal student loans on a year over year basis [I am still trying to reconcile the $77.3 billion that was reported in February with the $75.1 billion reported in the WSJ story. Incidentally, The College Board Trends in Student Aid for 2007-08 put the total of federal student loans at $66 billion for 2007-08. $75 billion is about a 14% increase over the College Board figures.]
As for the reasons for this increase, which Deputy Undersecretary Shireman described as "definitely above expectations:"
- Economic environment
- "The eye-opening increase in borrowing is largely due to the dire economic environment, which is causing more people to seek federal loans, he [Shireman] says."
- Increases in Stafford loan limits
- Rose from $23,000 to $31,000 for dependent undergraduates as of July 1, 2009
- Sharp reduction in private loans, which SLA estimates has dropped by $6 -$7 billion, due to major lenders retrenching as well as many leaving the business altogether
- Increase in student population driven by weak economy
- Go here for recent headlines about where they are headed