Student loan debt continues to grow but not because students are borrowing more. It’s because their parents are, according to savingforcollege.com.
Its publisher and vice president of research, Mark Kantrowitz, analyzed data from the National Postsecondary Student Aid Study, which is conducted every four years. The data shows that the average debt of college graduates with bachelor’s degrees increased only 1% from 2011-12 to 2015-16 — to $29,669 — but the average debt for Federal Parent PLUS loans grew slightly above 19% over the same period to $32,596.
Kantrowitz says the shift in borrowing from students to parents is due to students maxing out on loans, leaving parents to pick up the slack. The aggregate loan limit for federal student loans, known as Stafford loans, is $31,000 for students whose parents claim them as dependents and $57,500 for students independent of their parents.
Annual limits on student debt range from $5,500 to $7,500 for dependent students and from $9,500 to $12,500 for independent students. The ranges reflect different limits per year of college attendance — lower for freshman years, then steadily accelerating to higher limits for junior and senior years.
“More student loan borrowers are reaching these loan limits,” writes Kantrowitz. In the 2015-16 academic year, 40.3% of students reached the limit for Federal Direct Stafford Loans, up from 39.3% four years earlier.