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    #1

    federal/private

    Please make the following in red clear for me.

    There is an estimated $730 billion in outstanding federal and private student-loan debt..... and only 40% of that debt is actively being repaid.

    Does the above mean "the debt that students have to pay to federal government and private institutions such as banks"?

    Thank you.

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    #2

    Re: federal/private

    Quote Originally Posted by unpakwon View Post
    Please make the following in red clear for me.

    There is an estimated $730 billion in outstanding federal and private student-loan debt..... and only 40% of that debt is actively being repaid.

    Does the above mean "the debt that students have to pay to federal government and private institutions such as banks"?

    Thank you.
    Basically. Student loans are guaranteed by the federal gov't. There is debt that is owed under various federal programs and debt that is outside of these programs.

    (There have been recent changes to remove private banks from the process altogether.)

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    #3

    Re: federal/private

    Thank you for the help.

  1. Barb_D's Avatar
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    #4

    Re: federal/private

    I don't believe that's correct. There will always be private banks supplementing the borrowing allowed under federal programs, but it will be outside the amount guaranteed by the government. Federal student loans came in two flavors before, one where you borrowed directly from the government (direct loans) and one where you borrowed from private lenders operating under the federal student loan program (FFELP). But these had borrowing limits, and you couldn't exceed those limits. You could still go to a private bank and borrow additional funds beyond the limits of the federal student loan program. If you were a graduate student and had $30,000 a year in education expenses, you could borrow $19,000 in Federal student loans and another $11,000 in private student loans. While the latter were not guaranteed by the government (guaranteed means if the student doesn't pay, the government reimburses the lender a percentage of the loan amount), they still are not dischargable under bankruptcy. I thnk that the rules have changed as indicated above so that the federal loans can only be direct loans now, but the private lending still exists.
    I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.

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