America's students are facing a serious threat from subprime private loans, and the situation could worsen unless Congress votes to close a potential loophole in the proposed Consumer Financial Protection Agency (CFPA), according to a new study published by Demos, the U.S. Public Interest Research Group (US PIRG), and the United States Students Association.

The briefing paper shows that aggressively-marketed, loosely-regulated private loans are miring an increasing number of students in unnecessary debt. A startling 67 percent of the U.S. bachelor's degree graduates last year had student debt, averaging about $23,200 per indebted student. While most of that debt is in safer, lower-interest federal loans, a significant amount is in private loans that can carry interest rates of over 18 percent. It also shows that nearly 3 million American students took out private loans last year, up from less than 1 million just four years before.

Demos and PIRG also published six additional state briefing papers on the private loan markets in: