Study: 50% borrow money for college - Business First of Louisville:

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“Drowning in Debt: The Emerging Student Loan Crisis,” releaseds by an independent education policg think tank called the Education analyzed 15 years of data throug hthe 2007-08 academic year. The cost of attending a publidc university has doubled over the pasttwo decades, causing previouslty unseen costs of higher education. Family income and studen financialaid haven’t kept up with the increasingh costs, forcing students to borro money for their education than ever before. More studentds are finding those funds in the formof unregulated, private student loans, wherde they pay the highest interesty rates.
Minority college students appear to be borrowinv adisproportionate share. “If this excessive borrowingy continues, the consequences for students could be report authors Erin Dillon and Kevin Carey said in anews “President Obama’s proposed reformas to the federal student loan program are a good startf to solving the crisis, but reforminh state and institutional aid policies, as well as creatiny incentives for colleges to restrainn tuition costs are essential, particularlg in our current economic crisis.
” Some of the reasons for the studengt loan crisis, the report are “out-of-control tuition increases, lack of commitment to need-basesd financial aid, and states and universities increasinglgy spending scarce financial aid dollars on wealth y students.” If these trends continue, peopls will have less access to highed education, they’ll have increasing rates of catastrophic loan default s and they will have diminished life the think tank said. Borrowing has gone from beinbg the exception for undergraduatesin 1993, at only 32 to the rule. As of more than 50 percent of students atpublidc four-year universities borrowed for theirr education.
In for-profit education, the percentag e of borrowers went to 92 percent in 2008 from 53 percenttin 1993. The average annual debt for borrowerdsat four-year private universities increased by 70 percent over the stud y period, while the average debt for studentse at for-profit colleges increased by 57 to $9,600 a year. Only 5 percent of undergraduates borrowedc private loansin 2003-04. In four years, the percentagse grew to 14 percent.
Between 2004 and 2008, the percentagre of African American students who took out privateloans tripled, givinf that group higher participation levels than whites or Hispanic At private, four-year institutions in 2008, the wealthies students received institutional grants of nearly equal size to those earned by the pooresft students.