More than a million students default each year on their federal student loans, according to the Pew Charitable Trusts. Natalia Abrams, executive director of Student Debt Crisis, a group working to change higher-education loan policies, recommended that a student “always take out as little in loans” as possible. Students who need to borrow, Ms. Streeter said, should focus on federal loans, and aim to borrow the maximum amount allowed of federal loans before considering private loans from banks or other nongovernment lenders. Private loans are typically more expensive and lack the consumer protections that come with federal loans, like repayment plans tied to the borrower’s income and deferment options when borrowers run into financial trouble. But the pandemic upended many aspects of higher education, and it remains uncertain whether increases in student debt will resume as the nation begins to return to normal functioning, the student debt project reported last year.

Source: New York Times May 28, 2021 12:56 UTC