Students borrowing less for college, but here's who’s borrowing more

Student loan debt is a growing problem – and recent data shows borrowers are having a harder time paying back what they owe.

The good news? Undergraduate students are not taking out as many federal student loans, according to new data from Student Loan Hero. In fact, undergraduate and non-degree students were 23 percent less likely to take out a federal loan during the 2017-2018 school year when compared with five years earlier.

However, that difference appeared to be, at least partially, made up for by another group – undergraduates’ parents – who were  27 percent more likely to take out federal loans than they were five years ago.

Parents borrowed 3 percent– or $301 million – more when compared to the 2012-2013 school year. They also took out a larger proportion of Parent PLUS loans.

Other than parents borrowing on their behalf, lower college enrollment also contributed to reduced borrowing rates among undergraduates.

Nevertheless, student debt is still growing. Outstanding loan balances sit at nearly $1.6 trillion. Interest and late fees are also adding to what indebted borrowers owe.

Recent data from the Federal Reserve Bank of New York showed nearly 10 percent of student loan balances became seriously delinquent in the second quarter – even as aggregate loan delinquency rates improved.


The issue has made its way into the national discourse: Two 2020 Democratic candidates – Massachusetts Sen. Elizabeth Warren and Independent Vermont Sen. Bernie Sanders – have even released proposals to forgive borrowers of their student debt altogether.