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Private Student Loans

Private loans, also referred to as alternative loans, are issued by private commercial sources. They are most often used to bridge the financing gap between Federal loans and grants and tuition costs.

Since the early 1980s annual tuition growth has consistently outpaced inflation. In addition, Federal aid has not kept up with the spikes in tuition rates. In constant 2005 dollars, over a 10-year period ending in 2005-06, average tuition and fees rose 52% at public four-year colleges and universities, and 34% at private four-year colleges, while median family income rose 3% during that same time.

Slow growth in family incomes during a period of rapid escalation in college prices has increased reliance on grants and loans to finance higher eduation. Over half of the funds on which students rely to supplement family resources are in the form of loans. As the price of attending college has increased and family incomes, grant aid, and federal loans have failed to keep pace, student borrowing from private sources now equals about 25% of federal education loan volume.

Private student loans now total over $17 billion, having grown at an average annual rate of about 27% between 2000-01 and 2005-06, after adjusting for inflation. In this lending environment, MRU Holdings leverages its underwriting model to more intelligently credit underwrite students. The company aims to pool student loan portfolios and either sell or securitize them.

Visit www.MyRichUncle.com to learn more about our Private Loan program.