The amount of student loans in the U.S. is soaring: At the end of 2019, it skyrocketed to more than $1.5 trillion.
According to a report published at the beginning of February, education loans accounted for just 6.3 percent of America’s total debt in 2010, roughly $760 billion. That surged to 10.7 percent, or a whopping $1.5 trillion, by the end of the decade.
According to the Department of Education’s Federal Student Aid office, the maximum amount that an undergraduate student can borrow every year ranges from $5,500 to $12,500, depending on that student’s year in school, dependency status and the type of loan.
There are certain requirements that individuals must meet in order to obtain a student loan, though they differ between federal and private loans.
For a federal loan, individuals must:
- Demonstrate financial need
- Be a U.S. citizen or an eligible noncitizen
- Have a valid Social Security number
- If you’re a man, you need to be registered in the draft
- Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program
- Maintain satisfactory academic progress in college or career school
- Sign a form saying you will not default on a federal student loan; do not owe money on a federal student grant; will use federal student aid only for educational purposes
- Graduate from high school or receive your GED equivalent
Although specific requirements vary from lender to lender, these are the five most common factors that private banks take into consideration:
- Be enrolled in an eligible school
- Meet age, education and citizenship requirements
- Plan to use the loan for education expenses
- Meet credit and income criteria
- Be able to apply with a creditworthy cosigner if needed