Report: Overwhelming Majority of Private Loan Customers Making Regular Payments Again, Defaults at Record Lows
The private student loan market has stabilized and returned to pre-pandemic norms, according to a new report from MeasureOne, a consumer analytics company.
The study found that the overwhelming majority of students and families are once again making regular payments, despite the continued economic impacts of the pandemic. More than 98% of private student loans are successfully repaid. The report also concluded fewer students and families are relying on customer relief programs, which became popular options early in the pandemic.
As of June 2021, private student loans — which are fully underwritten to assess creditworthiness and ability to repay — make up 7.61% of the $1.7 trillion student loan market. The remaining 92%, or $1.59 trillion in student loans, are federal student loans made by the federal government.
As the leader in private student lending, Sallie Mae recommends families follow a three-step approach to financing their education:
- Start with money you won’t have to pay back. Supplement your college savings and income by maximizing scholarships, grants, and work-study.
- Explore federal student loans. We encourage students to explore federal student loan options by completing the FAFSA.
- Consider a responsible private student loan. Fill the gap between your available resources and the cost of college. We encourage students to evaluate all anticipated monthly loan payments, as well as how much the student expects to earn in the future, before considering a private student loan.
Sallie Mae is committed to helping students achieve their higher education goals. Through a free suite of tools and resources, including planning calculators, college comparison tools, scholarship searches, and FAFSA support, we help students and families maximize their options before borrowing. By providing the necessary resources to help students and families confidently navigate their higher education journey, Sallie Mae can set them up for a lifetime of success.
Read the full report here.