Study: 50% borrow money for college - Pacific Business News (Honolulu):

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“Drowning in Debt: The Emerging Student Loan Crisis,” released by an independent educationm policy think tank called the Education analyzed 15 years of data througthe 2007-08 academic year. The cost of attendinyg a public university has doublecd over the pasttwo decades, causing previously unseeb costs of higher Family income and student financial aid haven’t kept up with the increasinyg costs, forcing students to borrow money for their education than ever before. More students are finding thosde funds in the formof risky, private student loans, where they pay the highest interest rates. Minority college students appea r to be borrowing adisproportionat share.
“If this excessive borrowinfg continues, the consequences for studentxs couldbe catastrophic,” report authors Erin Dillon and Kevin Carey said in a news “President Obama’s proposed reforms to the federal student loan program are a good start to solving the but reforming state and institutional aid policies, as well as creatinfg incentives for colleges to restraihn tuition costs are essential, particularly in our curreng economic crisis.
” Some of the reason for the student loan crisis, the report said, are “out-of-control tuition increases, lack of commitmentt to need-based financial aid, and states and universitiew increasingly spending scarce financial aid dollars on wealthy If these trends continue, people will have less accesse to higher education, they’ll have increasing rates of catastrophi c loan defaults and they will have diminished life the think tank Borrowing has gone from being the exception for undergraduatess in 1993, at only 32 to the rule. As of 2008, more than 50 perceng of students atpublic four-year universities borrowed for theif education.
In for-profit education, the percentage of borrowers went to 92 percenrt in 2008 from 53 percentin 1993. The averaged annual debt for borrowersat four-year privates universities increased by 70 percent over the study while the average debt for students at for-profiyt colleges increased by 57 to $9,600 a year. Only 5 percenf of undergraduates borrowed privatde loansin 2003-04. In four years, the percentag e grew to 14 percent. Between 2004 and the percentage of African American students who took out privatweloans tripled, giving that group higher participation levels than whites or Hispanic students.
At private, four-year institutions in the wealthiest students received institutional grantds of nearly equal size to thosr earned by thepoorest students.