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College Students and Recent Grads

Student Loans by the Numbers: Average Student Loan Debt Statistics

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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The numbers don’t lie: As college costs have risen in recent decades, many students and their families have been forced to take out more student loans to keep up. Seeing the statistics behind college debt can help shine a light on how big the student loan crisis has become and whom it’s affecting most.

Average Student Loan Debt: In a Nutshell

  • The total amount of student debt in the U.S. has reached $1.53 trillion, making student loans the nation’s second-largest source of consumer debt, below only mortgages (and well above credit cards), according to the Federal Reserve.
  • The average student loan debt for each borrower at $36,314 owed across 3.3 student loans, according to a MagnifyMoney analysis of anonymized My LendingTree users’ September 2018 credit reports. (Note: LendingTree is MagnifyMoney’s parent company)
  • Nearly one in five adults (18.2%) in the U.S. has student debt, which is around 44 million Americans.
  • Outstanding student debt more than doubled (a 167% increase) over the past 10 years alone to its current peak. The number of Americans with student loan debt also rose 51% in the same period.
  • Across all types of institutions, the average annual cost of college was $23,091 in 2016-17. Students who borrow for college take out $6,988 in federal student loans per year, on average.

To get a complete picture of the situation, we’ve collected recent data on student loans, college costs and other student aid.

How Much Does College Cost?

In recent decades, college costs have shot up, often forcing today’s students and their families to pay more out of pocket and borrow more in student loans to cover educational expenses.

Here’s a look at the average college costs that today’s students face, by different types of institutions.

Average College Costs All Institutions

Tuition and
Fees

Dormitory
Rooms

Board

Total

All Institutions

$12,219

$6,106

$4,765

$23,091

Public Institutions

$6,817

$5,859

$4,561

$17,237

Nonprofit Institutions

$32,556

$6,704

$5,291

$44,551

For-Profit Institutions

$14,419

$6,889

$4,123

$25,431

Source: The National Center for Education Statistics

Average College Costs 4-Year Institutions

Tuition and
Fees

Dormitory
Rooms

Board

Total

All Institutions

$15,512

$6,231

$4,850

$26,593

Public Institutions

$8,804

$6,017

$4,666

$19,488

Nonprofit Institutions

$32,720

$6,709

$5,273

$44,702

For-Profit Institutions

$14,423

$6,996

$4,113

$25,532

Source: The National Center for Education Statistics

Average College Costs 2-Year Institutions

Tuition and
Fees

Dormitory
Rooms

Board

Total

All Institutions

$3,518

$3,931

$3,149

$10,598

Public Institutions

$3,156

$3,822

$3,113

$10,091

Nonprofit Institutions

$15,293

$5,609

$4,350

$25,252

For-Profit Institutions

$14,397

$6,290

$4,340

$25,027

Source: The National Center for Education Statistics

How Much Have College Costs Risen?

The cost of a college degree has risen much more steeply over the past five decades than overall inflation and wage growth.

Here’s a look at how college prices have changed over the past 50 years. Costs are adjusted for inflation and include room and board, tuition and other related fees.

How Are Students Using Financial Aid?

Student loans are just one form of financial aid that can help pay for a college degree. Gift aid — such as grants from the federal government, state or local organizations or from colleges themselves — can lower a student’s net college price and the need for student loan debt.

But as college costs have increased, student aid awards have not kept up. While most college students receive some form of student aid, just under half (45.7%) of students rely on student loans, borrowing nearly $7,000 a year.

Percentage of Students Who Receive Student Aid. 2015 - 2016 Academic Year

Institution Type

All Aid

Federal Grants

State/Local Grants

InstitutionaI Grants

Student Loans

All Institutions

82.7%

42.7%

32.3%

44.40%

45.7%

Public

80.2%

42.3%

37.3%

35.6%

38.2%

Nonprofit

89.6%

35.2%

23.8%

78.7%

60.9%

For-Profit

86.5%

69.8%

8.6%

25.3%

74.4%

Source: The National Center for Education Statistics

How Much Has Federal Student Loan Debt Risen?

The federal government remains the top source of student loan debt, lending far more than states, banks and other institutions. Of the $1.53 trillion in outstanding student debt, $1.38 trillion takes the form of federal student loans.

This college debt has increased by $860 billion since 2007, a sharp difference of 167% in just over 10 years. Meanwhile, the number of people who hold federal student loans has also risen from 28.3 million in 2007 to 42.8 million, a 51% increase.

How Much Do People Owe the Government in Student Debt?

Next, take a look at how much borrowers owe in federal student debt. The average student loan debt is $32,150 across all types of federal student loans.

But most borrowers owe far less than this, with a majority (57.3%) carrying $20,000 or less in federal student loan debt.

Six-figure student debt is, fortunately, still fairly rare, with just 5.5% of borrowers owing $100,000 or more in federal loans.

Student loan balances also vary by age, with borrowers ages 35 to 49 having the highest average student loan debt, at $37,051. That average then eases for those above 50, but not by that much. And, of course, borrowers who are college-aged (24 or younger) have the smallest balances, since this group includes those still taking out loans for their education.

Overall, borrowers between the ages of 25 to 49 account for the bulk of college debt, with just under a trillion, or $995.1 billion, of outstanding federal student loans.

Who Is Defaulting?

With balances this high, not all borrowers can keep up with student loan payment. If nine months of nonpayment pass, a federal student loan defaults.

Options such as taking student loan deferment and forbearance or enrolling in income-driven repayment plans can often be effective ways to avoid defaulting. But the data suggest that some borrowers still aren’t taking advantage of these federal student loan benefits.

In 2017, more than 1 in 10 borrowers who had left college in 2014 had since defaulted. Default rates are higher among students leaving two-year colleges and schools with programs shorter than two years.

For-profit colleges also tended to have higher rates of default, compared to public colleges and private nonprofit schools.

Percentage of people who defaulted since they entered their repayment phases three years ago (2014)

All Institutions

11.5%

Public

11.3%

Nonprofit

7.4%

For-profit

15.5%

Less-than-2-year institutions

17.0%

Public

13.80%

Nonprofit

19.80%

For-profit

17.0%

2-year institutions

18.2%

Public

18.3%

Nonprofit

17.6%

For-profit

17.5%

4-year institutions

9.0%

Public

7.5%

Nonprofit

7.0%

For-profit

14.6%

Source: The National Center for Education Statistics

What About Graduate Student Loan Debt?

Completing an advanced degree can also mean taking on a significant amount of debt, though here, not all graduate student debt is created equal. For example, 48.2% of research doctorate degree holders have student loan debt, but that proportion is significantly higher — 74.5% — for those with professional doctorate degrees.

Among those with graduate student loan debt, balances range from $50,300 among master’s degree holders up to $171,700 for those with professional doctorates.

Digging a little deeper, the data show that earning an advanced medical degree (such as an MD) comes with the highest levels of debt. Eight in 10 graduates with these degrees have student debt, with average student loan debt balances at $223,100.

What Do We Know About Private Student Loan Debt?

Besides federal student loan debt, private student loans from banks and other lenders are also an important piece of the puzzle. The amount of outstanding private student loan debt is $67.1 billion, most of which (88.3%) was borrowed for undergraduate studies.

Private Loans Outstanding

Q1 2018

Current Balance

$67.12 billion

% of Loans for Undergraduate School

88.3%

% of Loans for Graduate School Source: MeasureOne

11.7%

Source: MeasureOne

Repayment Status of Private Loans

Q1 2018

Grace

2.3%

Deferment

21.1%

Forbearance

2.5%

Repayment

74.1%

Source: MeasureOne

Percentage of Payable Private Loans Currently Delinquent

Q1 2018

30-89 days delinquent

2.8%

90+ days delinquent

1.50%

Charge-offs

1.80%

Source: MeasureOne

How Much Can That Expensive Degree Earn Me?

With college costs and average student loan debt levels on the rise, some borrowers might wonder whether their education is worth the price.

Overall, earning one or more degrees does substantially increase income. Someone with a bachelor’s degree earns 57.1% more on average than a worker with only a high school diploma. Those who hold a master’s degree or higher tend to earn twice as much as those with high school diplomas, and 28.2% more than graduates who hold a bachelor’s degree.

Of course, a college graduate’s course of study has a huge impact on their career opportunities and earning potential. Engineering fields offer the highest pay, with median salaries of $69,650 among college graduates. Studying theology and religious studies, on the other hand, resulted in the lowest pay at just $34,420 per year.

 Median Salary of Bachelor's Holders by Field of Study                   

Field of Study

2016

Agriculture

$44,590

Architecture

$50,000

% of Loans for Graduate School Source: MeasureOne

2016

Area, ethnic,and civilization studies

$44,260

Arts, fine and commercial

$39,830

Fine arts

$36,270

Commercial art and graphic desisn

$40,300

Business

$50,360

Business, general

$50,290

Accounting

$55,400

Business management and administration

$48,280

Marketing and marketing research

$50,200

Finance

$60,070

Management information systems and statistics

$59,950

Business, other and medical administration

$49,600

Communications and communications technologies

$45,260

Computer and information systems

$65,440

Construction/electrical/transportation technologies

$55,310

Criminal justice and fire protection

$40,990

Education

$40,240

General education

$40,270

Early childhood education

$35,940

Elementary education

$39,070

Secondary teacher education

$39,070

Education,other

$40,050

Engineering and eneineering-related fields

$69,650

General engineering

$63,770

Chemical engneering

$74,880

Civil engineering

$63,110

Computer engineering

$78,080

Electrical engineering

$74,790

Mechanical engineering

$71,860

Engineering, other

$65,480

Engineering technologies

$59,630

English language and literature

$40,280

Family and consumer sciences

$37,680

Health professions

$51,830

General medical and health services

$50,060

Nursing

56,350

History

$43,430

Liberal arts and humanities

$40,020

Linguistics and comparative language and literature

$42,040

Mathematics

$50,340

Multi/ interdisciplinary studies

$43,170

Natural sciences

$45,340

Biology

$45,330

Environmental science

$41,000

Physical sciences

$49,110

Physical fitness,parks,recreation and leisure

$40,080

Philosophy and religious studies

$39,810

Psychology

$40,100

Publicadm inistration and public policy

$56,460

Social sciences

$50,310

Anthropology and archeology

$39,800

Economics

$60,350

Geography

$45,210

lnternational relations

$52,290

Political science and government

$50,330

Sociology

$40,030

Miscellaneous social sciences

$42,190

Social work and human services

$36,200

Theology and religious vocations

$34,420

Other fields

$40,380

Source: The National Center for Education Statistics

How Many Students Are Leaving School Without Getting a Degree?

For students who have already taken out student debt, completing their degree could make the difference between easily repaying their loans or ending up in default.

Part-time students are much likelier to drop out of college overall, while for-profit college have the worst attrition rates in terms of types of institutions.

As student loan balances have grown, so has the impact of this debt has on borrowers’ lives. By understanding the numbers underlying the student debt crisis, we can better gauge its effects. Overall, though, a degree is still worth getting despite rising college costs and the amount of debt needed to pay them.

But today’s students and borrowers need to be wiser with their educational and financial choices to avoid the worst outcomes. As the data suggest, the type of school and the field of study can play a big role here.

Statistics can’t always capture individual cases, as one student’s situation won’t necessarily match the averages. But one thing that might hold true for most if not all borrowers is the importance of knowing your options to manage this debt. If you owe student loans, check out our top picks for refinancing student loans to help you get out of being another statistic in the ongoing student debt crisis.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
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Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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College Students and Recent Grads

What Is a Private Student Loan? Here’s the Must-Know Info You Need

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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College is more expensive than ever, and most students cover costs with a mix of savings, scholarships and federal student loans from the Department of Education. But what is a private student loan, and how does it fit into this picture?

Private student loans offer a way to cover a gap in funding if you don’t have enough after maxing out your available federal loans. But these private student loans differ from federal ones in major ways, so it’s crucial to understand what you’re getting into before signing on the dotted line.

Here’s what you and your family need to know.

What is a private student loan?

A private student loan is money you borrow from a private lender (such as a bank or credit union) to put toward your education. Most lenders require you to be enrolled at an eligible school to qualify for a loan.

Each lender sets its own criteria, which you’ll have to meet in order to get the loan. Some will let you borrow up to cost of attendance of your school, while others set annual borrowing limits.

If you qualify, many lenders will send the funds directly to your financial aid office to cover your tuition bill. Any remaining money will get sent back to you to use for living expenses or, if you don’t need it, to return to your lender. Note, however, that some lenders will send the funds directly to you instead, meaning it becomes your responsibility to use them for your tuition bill.

When you borrow, you’ll choose repayment terms, typically between five and 15 years. You’ll also likely get to choose between a fixed interest rate, which stays the same over the life of your loan, and a variable rate, which can start lower but might also increase over time.

Each lender could offer different rates and terms, so it’s important to shop around before a private loan to find the best one.

What’s the difference between a private and federal student loan?

As a college or graduate student, you can borrow private student loans from a banking institution, or you can take out federal student loans from the government. Here are the main ways in which private student loans differ from their federal counterparts:

  • Private student loans require a credit and income check. While anyone who qualifies for federal aid can borrow federal loans, private loans have stricter requirements. To qualify, you’ll need to meet certain criteria for credit and income — or apply with a cosigner who can.
  • You’ll probably need a cosigner. You can borrow federal student loans in your own name, but if you’re an undergraduate, you’ll probably need a cosigner (such as a parent or guardian) to take out a private student loan. Because their name is on your loan, the cosigner becomes just as responsible for repaying the debt as you are.
  • Private student loans have less flexible repayment plans. Federal student loans come with a variety of repayment plans, including income-driven repayment, graduated repayment, deferment and forbearance. Private lenders, on the other hand, usually offer plans between five and 20 years, which you select at the time of borrowing. Some lenders will let you postpone payments through forbearance if you lose your job or go back to school, but this isn’t guaranteed.
  • You might be considered in default after three missed payments. Federal loans come with a 270-day delinquency period before your loan is considered to be in default, but private lenders might put your loan into default status after just three months of missed bills.
  • Private student loans can have a fixed or variable rate. While federal Direct loans to undergraduates have a fixed rate of 5.05% for the 2018-19 school year, private loans can have either a fixed or variable rate — usually, the choice is yours. Rates typically range from around 4% to 13%, depending on your (or your cosigner’s) credit.
  • You won’t get your interest subsidized. Students with financial need can qualify for subsidized federal loans, which don’t accrue interest until you graduate and your six-month grace period ends. Private lenders don’t offer subsidized loans, so interest will start piling up as soon as you get the money.
  • Private student loans aren’t eligible for federal forgiveness programs. Programs such as Public Service Loan Forgiveness only work for federal loans, not private ones. That said, private loans may be eligible for some loan repayment assistance programs, which could be offered by your state or a private organization.

So if federal student loans have more flexible repayment plans and better interest rates, why borrow private student loans at all? The most common reason is because federal loans come with annual borrowing limits, so you might not have enough funding to pay tuition.

Unless yours is a rare case — for instance, if you’re a graduate student who could get better rates on a private loan and don’t need the federal protections — you’ll want to turn to federal loans first. Unfortunately, however, more than half of students borrow privately before exhausting their federal options.

What are the interest rates on private student loans?

The interest rates on private student loans vary from lender to lender. As of April 2019, some of the most competitive lenders offer fixed rates starting at 3.89% and variable rates starting at 3.00%.

Although this beats the current rate on federal loans, you or your cosigner would be unlikely to score these lowest interest rates unless you have excellent credit. On the other end of the spectrum, fixed rates can go up to 12.68%, and variable rates as high as 12.22% among our recommended lenders.

And don’t forget that these figures do change — in September 2018, rates ran as high as 14.24%. Interest this high could be a real burden for the 15% of graduates who carry private student loans.

As for deciding between fixed and variable rates, remember that the variable rate exposes you to the risk that rates (and possibly your monthly payment) could rise. If you’re confident you can pay your debt off quickly, a variable loan might be worth the risk, while if you’re planning a 10- or 15-year repayment, you might be safer with a fixed loan.

That said, you could always refinance your student loans for new rates and terms if you have the credit to qualify or have a cosigner who can do so.

What about repayment terms?

When you borrow a private student loan, you’ll get to choose your repayment terms. A 10-year plan is standard, but some lenders also let you opt for five, eight or 15 years.

You can use our loan calculator to estimate what your monthly payments would be on each plan. It might be tempting to choose a five-year plan and get out of debt more quickly, but it’s not worth it if you can’t keep up with the higher monthly payments. Meanwhile, on the flip side, a long term with lower monthly payments might appeal to you, but consider how much you’ll have to fork over in interest over the years. The calculator can reveal how much you could expect to pay over time — that said, you can typically prepay your loan without penalty if you suddenly come into some money.

Before you borrow, it’s also crucial to go over your repayment agreement. Some private lenders let you defer repayment while you’re a student and for six months after you graduate, while others require immediate payments or interest-only payments while you’re still in school.

Also make sure you know when your first payment is due so you don’t fall behind or go into default.

Learn what private student loans are before you borrow

Private student loans have both pros and cons for you as a borrower.

On one hand, they can be useful tools for paying for college and earning your degree. But on the other, as a downside, you’ll probably have to enlist a cosigner to qualify, and sharing debt doesn’t always go smoothly.

Plus, you might have relatively high interest rates, meaning you could end up paying back a lot more than you borrowed.

Whatever you decide, make sure you understand what private student loans are before you borrow any. That way, you can make an informed decision about borrowing before it’s too late.

And make sure to compare offers with multiple lenders so you can find one with the best benefits, rates, and terms for your private student loan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
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Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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College Students and Recent Grads

How to Get Rid of Private Student Loans: Forgiveness and Other Options

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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After maxing out their eligibility for federal student loans, many students and families turn to private student loans to pay for college. While private loans can help fill the funding gap, they can also become burdensome if you borrow too much or get saddled with high interest rates. That’s where private student loan forgiveness and other types of assistance come in handy.

If you’re wondering how to get rid of private student loans — and do it quickly — know that you do have options. And although none of them will wipe away your debt overnight, they could help you regain control of your finances. Here are eight different possibilities to explore:

1. Qualify for private student loan forgiveness programs

Although private student loans aren’t eligible for Public Service Loan Forgiveness, you can find some student loan forgiveness programs for private loans. National, state and private organizations will wipe away a large portion of your debt, or sometimes all of it, depending on your profession or location.

For instance, the National Health Service Corps Loan Repayment Program offers up to $50,000 in student loan assistance to healthcare professionals who work in an underserved area for at least two years. Likewise, the Herbert S. Garten Loan Repayment Assistance Program has a similar reward for eligible lawyers.

Many states, as well as some universities, also offer student loan repayment assistance for qualifying professionals. Some of the common eligible occupations include doctor, nurse, dentist, pharmacist and teacher. Check with your state to find out if it offers student loan forgiveness for private loans.

2. Find an employer with a student loan assistance benefit

Even if you can’t qualify for private student loan forgiveness programs, you might get a student loan assistance benefit from your employer. Some companies will match a percentage of your student loan payments to help you pay off that debt faster — for example, Fidelity and Aetna each offer up to $10,000 in student loan assistance to their employees.

According to Forbes, student loan matching was the hottest benefit of 2018. And with the student debt crisis continuing to weigh on the U.S., more companies might follow suit and introduce this benefit in the future.

If you are looking for a job or open to changing your employer, consider companies with this perk. They might help you make a bigger dent in your student loan balance than you’d be able to on your own.

3. Postpone payments through forbearance

While the government offers a number of flexible repayment plans for federal student loans, including income-driven repayment, private lenders don’t often have equivalent programs. On the other hand, some do allow you to pause payments through deferment or forbearance if you lose your job, return to school or run into financial hardship.

If you’re going through a financial rough patch, reach out to your lender to find out if you can put your loans on pause for a few months. This break from payments might offer the relief you need until you can get back on your feet.

Just remember that interest typically continues to accrue during a period of forbearance, so you might end up facing a bigger balance once repayment resumes.

4. Request a temporary interest-only payment plan

Along with temporary forbearance, some private lenders offer the option of interest-only payments. With this approach, you could postpone full repayment while still making small payments on interest from month to month.

Although you won’t be chipping away at your principal, you will pay down interest before it accumulates. These reduced payments could give you some breathing room until you’re able to enter full repayment.

5. Negotiate lower payments with your lender

Private lenders typically don’t offer income-driven repayment plans, but some might be flexible if you’re really struggling — after all, they don’t want you to default on your loan completely. So if you can’t keep up with payments, call your lender and find out if they can adjust your bills.

6. Refinance your private student loans for better terms

By refinancing your student loans, you can restructure your debt with new terms — typically between five and 20 years — and adjusted monthly payments.

You could opt for a short term, which might increase your monthly payments but will get you out of debt faster and save you money on interest. Or, if your bills are too burdensome, you could choose a longer term to lower your monthly payments.

You might also snag a lower interest rate, resulting in major savings over the life of your loan.

But while student loan refinancing has a number of major benefits, it’s not accessible to everyone. You’ll need to meet certain requirements for credit and income to qualify — or apply with a cosigner who can. And if you decide to refinance, make sure to shop around among multiple lenders to get the best deal available to you.

7. Discharge your private student loans through bankruptcy

Student loans are notoriously difficult to discharge through bankruptcy, but this route isn’t impossible. If you qualify for Chapter 7 or Chapter 13 bankruptcy, you could wipe away your private student loans.

You will have to prove your student loans are causing undue hardship, and the entire process could destroy your credit and cost you thousands in legal fees. But if bankruptcy is your only option, know that it could lead to wiping away your private student loans.

8. Apply for permanent and total disability discharge

Finally, experiencing a permanent and total disability might remove your obligation to pay back your student loans. Some lenders will wipe away your debt in this circumstance. If you’re unable to work due to a disability, reach out to your lender to find out if you could qualify for private student loan forgiveness.

How to get rid of private student loans

While options such as forbearance and interest-only payments can decrease your bills, they won’t help you get rid of your private student loans any faster. If you’re set on shedding your debt ASAP, your best bet (outside of private student loan forgiveness) is throwing extra payments at your student loans.

If you can find ways to increase your income or decrease your spending — or both — you can use the extra money to make additional payments on your debt. This will save you money on interest and move up the timeline on repayment.

But if your budget is too tight right now, lowering payments might be the best temporary solution to help you manage your private student loans without going into default.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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