The economicdiversity.org database includes campus-by-campus data on the total student loan debt of graduating seniors. The numbers come from the Common Data Set, and are reported by the campuses to the various publishers of college guides. The instructions to campuses tell them to include private loans in the total. But at a recent meeting between campus data-keepers and the publishers, it became clear that some campuses have a better handle than others on the amount of private loans being made to their students.
To be clearer about the totals in future data collections, the Common Data Set will, in the future, ask campuses to provide separate totals for federal and private loans; some campuses will input a “not available” in the private loan field.
One solution to this data problem would be for the feds to require that private loans be certified by the college in order to qualify for the tax deduction on student loan interest. That way, financial aid administrators would be able to track who has private loans, and how much students have truly borrowed. They would also be able to check to make sure that the student isn’t making a mistake by signing up for a high-rate or otherwise undesirable loan. This might also help borrowers down the line, since many don’t know the differences between federal and private loans, and are unclear as to which they have. If aid administrators had more information, they could more easily advise students about the risks and tradeoffs of alternative loans.