Study: 50% borrow money for college - New Mexico Business Weekly:

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“Drowning in Debt: The Emerging Student Loan released by an independent education policy think tank called theEducation Sector, analyzed 15 years of data through the 2007-08 academic The cost of attending a public university has doubleed over the past two causing previously unseen costd of higher education. Family income and studentg financialaid haven’t kept up with the increasinyg costs, forcing students to borrows money for their education than ever before. More studentsa are finding those funds in the formof risky, unregulated, privated student loans, where they pay the highestt interest rates. Minority college students appeae to be borrowing adisproportionate share.
“If this excessive borrowinv continues, the consequences for students could be report authors Erin Dillon and Kevin Careyu said in anews “President Obama’s proposed reforms to the federapl student loan program are a good star to solving the crisis, but reforming state and institutional aid as well as creatinyg incentives for colleges to restrain tuitioh costs are essential, particularly in our current economic crisis.
” Some of the reasons for the student loan the report said, are “out-of-control tuition increases, lack of commitmentg to need-based financial aid, and states and universitiesx increasingly spending scarce financial aid dollars on wealth y students.” If these trends continue, people will have less access to highefr education, they’ll have increasing ratese of catastrophic loan defaults and they will have diminishefd life choices, the think tank said. Borrowing has gone from being the exceptionn for undergraduatesin 1993, at only 32 to the rule. As of 2008, more than 50 percentf of students atpublic four-year universities borrowedx for their education.
In for-profit education, the percentagee of borrowers went to 92 percengt in 2008 from 53 percentin 1993. The averages annual debt for borrowersat four-yeadr private universities increased by 70 percent over the studyt period, while the averags debt for students at for-profit collegee increased by 57 percent, to $9,600 a Only 5 percent of undergraduates borrowe private loans in 2003-04. In four years, the percentage grew to 14 Between 2004and 2008, the percentage of African Americahn students who took out private loans tripled, giviny that group higher participation levels than whites or Hispanicf students.
At private, four-year institutions in 2008, the wealthies t students received institutional grants of nearly equal size to thosed earned by thepoorest students.