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Students Face Hit As Private Lending Dries Up

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A retreat by private-sector lenders from the market for education loans is threatening to keep thousands of students out of college in the coming academic year.

About 10% of the nine million student borrowers in the U.S. seek such private loans, which supplement the limited amounts available from government-aid programs. Over the past decade, as government grants and loans have failed to keep pace with rising tuitions, private-loan borrowing has increased more than tenfold to $17.1 billion annually.

More than two dozen lenders, including Bank of America Corp. and Citigroup Inc., have stopped or curtailed private lending to students since ...