Roughly 45 percent fewer UI students have taken out private loans for this academic year than the number who did last year, officials estimate.

Though official statistics are pending, several factors have contributed to the expected decrease, said Beth Oakes, an associate director of the UI Office of Student Financial Aid.

In the last academic year, 3,253 UI students took out private loans for a total of $29.3 million, compared with unofficial numbers this year showing roughly 1,800 students for $18.4 million.

Oakes will send official loan statistics to the state Board of Regents later this month.

Private loan agencies, hurt by the banking crisis, are having trouble acquiring funds for students, she said. The companies also found themselves stuck in a financial hole from offering low interest rates in the 1990s.

“[The 2007-2008 school year] was the very end of the peak of private borrowing,” she said.

For students struggling to pay for school, Oakes said, federal loans may be a better alternative in the long run. The federal government enforces a fixed interest rate, currently 6.8 percent, while private companies may vary their rates.

“When you have variable interest rates, a student has to ask, ‘What’s my interest rate going to be 10 or 12 years from now?’ ” Oakes said.

But some students are not eligible to receive enough money from federal loans to cover their needs. They may work full-time or their parents may make too much money to qualify for financial aid, for example, so they are forced to borrow privately.

UI freshman Christian Erickson said he borrowed as much federal money as he was entitled to this semester, but he still had to pay around $1,000 to cover the cost of his tuition. He said that he might consider taking out a private loan at some point, because he is also thinking of moving into an apartment.

“My [federal] loan was good enough for now because I live at home,” the 18-year-old said. “But if I move to Coralville with my friend, I might look at taking out more.”

Though Erickson was hoping for more money when he filled out the federal Free Application for Student Aid, he understands how student loans work.

“They didn’t see that I needed a huge loan, which made sense to me,” he said.

Another concern for students forced to take out numerous loans is repaying them after graduation. Students who take out federal and private loans have to make two payments each month.

Oakes said an additional drawback to students having to borrow privately is it is becoming hard to obtain those funds.

“When the banking crisis got tight, private loans backed out, and credit criteria got more stringent,” she said. “Students were wondering, ‘How do I pay for my education.’ ”