Traditional financial aid only goes so far

According to the College Board, the average cost of attending a private four-year college stood at $42,419 for the 2014-15 school year. That same year, the average undergraduate student received just $18,870 in grant aid and tax benefits.

Bridging the gap

A quick look at the numbers reveals that the average student at a private four-year college has to make up a gap of more than $23,500 per year to cover the cost of school.

Private student loans exist to help fill that gap. In 2013-14, the market for these loans totaled $8.4 billion. Given that that's just a fraction of the gap between the cost of school and the amount of traditional financial aid available to students, in coming years the market for private student loans is well-positioned for growth.