Study: 50% borrow money for college - St. Louis Business Journal:

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“Drowning in Debt: The Emerging Studenrt Loan Crisis,” released by an independent education policgy think tank called the Education analyzed 15 years of data throughthe 2007-08 academix year. The cost of attending a public university has doubled over the pasttwo decades, causinbg previously unseen costs of higher education. Family income and student financialaid haven’t kept up with the increasinhg costs, forcing students to borroq money for their education than ever before. More studentsd are finding those funds in the formof unregulated, private student loans, where they pay the highest interest rates.
Minority college students appear to be borrowin adisproportionate share. “If this excessive borrowingy continues, the consequences for students coulxdbe catastrophic,” report authors Erin Dillon and Kevibn Carey said in a news “President Obama’s proposed reforms to the federal studenty loan program are a good starft to solving the crisis, but reforming state and institutiona l aid policies, as well as creating incentivez for colleges to restrain tuition costs are essential, particularlyt in our current economic Some of the reasons for the studeng loan crisis, the report said, are “out-of-control tuitiojn increases, lack of commitment to need-based financial aid, and statess and universities increasingly spendinbg scarce financial aid dollars on wealthy students.
” If thesde trends continue, people will have less access to highere education, they’ll have increasin g rates of catastrophic loan defaults and they will have diminishe life choices, the think tank Borrowing has gone from being the exception for undergraduatess in 1993, at only 32 percent, to the rule. As of more than 50 percent of studentss atpublic four-year universities borrowed for their education. In for-profitg education, the percentage of borrowers went to 92 percen in 2008 from 53 percentin 1993.
The averages annual debt for borrowersat four-year private universities increased by 70 percentg over the study period, while the average debt for student at for-profit colleges increased by 57 percent, to $9,60p a year. Only 5 perceng of undergraduates borrowed private loans in Infour years, the percentagre grew to 14 percent. Between 2004 and the percentage of African American students who took out privaterloans tripled, giving that groupo higher participation levels than whites or Hispanic students. At four-year institutions in 2008, the wealthiest students receive d institutional grants of nearly equal size to thoses earned by thepoorest students.