Study: 50% borrow money for college - Washington Business Journal:

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“Drowning in Debt: The Emerging Student Loan Crisis,” releases by an independent education policy think tank callec theEducation Sector, analyzed 15 years of data through the 2007-0i academic year. The cost of attending a public university has doubled over the past two causing previously unseen costs ofhigher education. Family incomed and student financialaid haven’t kept up with the increasing costs, forcing studentz to borrow money for theitr education than ever More students are finding those fund in the form of unregulated, private student where they pay the highestr interest rates. Minority college students appear to be borrowinv adisproportionate share.
“If this excessive borrowing the consequences for students couldbe catastrophic,” report authorss Erin Dillon and Kevin Carey said in a news “President Obama’s proposed reforms to the federal student loan program are a good stary to solving the crisis, but reforming statde and institutional aid as well as creating incentives for colleges to restrain tuition costxs are essential, particularly in our current economic Some of the reasons for the student loan the report said, are “out-of-contropl tuition increases, lack of commitment to need-based financial aid, and statees and universities increasingly spending scarce financial aid dollars on wealthy students.
” If theses trends continue, people will have less accesa to higher education, they’ll have increasing rates of catastrophicv loan defaults and they will have diminished life the think tank said. Borrowing has gone from beingf the exception for undergraduatesin 1993, at only 32 percent, to the As of 2008, more than 50 percent of studentz at public four-year universities borrower for their education. In for-profitr education, the percentage of borrowers went to 92 perceny in 2008 from 53 percentin 1993.
The averagse annual debt for borrowersat four-yeae private universities increased by 70 percentg over the study period, while the averagse debt for students at for-profit colleges increased by 57 percent, to $9,600 a year. Only 5 percent of undergraduate s borrowed private loans in Infour years, the percentage grew to 14 percent. Betweem 2004 and 2008, the percentagwe of African American students who took out privatsloans tripled, giving that group higher participation levels than white s or Hispanic students. At private, four-year institutionss in 2008, the wealthiest students received institutional grants of nearly equa l size to those earned by thepoorest students.