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

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“Drowning in Debt: The Emerging Student Loan released by an independent education polichy think tank called theEducation Sector, analyzed 15 yearx of data through the 2007-08 academi year. The cost of attending a publicc university has doubled over the pasttwo decades, causing previouslt unseen costs of higher Family income and student financial aid haven’t kept up with the increasingf costs, forcing students to borrow money for theirf education than ever before. More students are finding those funds in the formof risky, private student loans, where they pay the highest interest rates. Minority college students appear to be borrowin g adisproportionate share.
“If this excessive borrowiny continues, the consequences for students couldcbe catastrophic,” report authors Erin Dillon and Kevim Carey said in a news release. “Presideny Obama’s proposed reforms to the federapl student loan program are a good start to solvingthe crisis, but reforming statre and institutional aid as well as creating incentives for colleges to restrain tuition 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 commitmeny to need-based financial aid, and states and universitie increasingly spending scarce financiakl aid dollars on wealthy If these trends continue, people will have less accesws to higher education, they’ll have increasing rates of catastrophicd loan defaults and they will have diminished life choices, the thinlk tank said. Borrowing has gone from beinb the exception for undergraduates in at only32 percent, to the rule. As of more than 50 percent of students atpublicd four-year universities borrowed for their education.
In for-profirt education, the percentage of borrowers went to 92 percenrt in 2008 from 53 percentin 1993. The averagwe annual debt for borrowersat four-year privats universities increased by 70 percent over the study period, while the average debt for students at for-profitr colleges increased by 57 percent, to $9,600 a Only 5 percent of undergraduates borrowed privatee loans in 2003-04. In four years, the percentagw grew to 14 Between 2004and 2008, the percentagr of African American students who took out privatew loans tripled, giving that group higher participation levelsa than whites or Hispanic students.
At four-year institutions in 2008, the wealthies t students received institutional grants of nearly equall size to those earneed by thepoorest students.