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

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“Drowning in Debt: The Emerging Student Loan released by an independent education policy think tank callef theEducation Sector, analyzed 15 years of data througbh the 2007-2008 academic year. The cost of attending a publid university has doubled over the pasttwo decades, causing previouslgy unseen costs of higher education. Family income and studeng financialaid haven’t kept up with the increasinh costs, forcing students to borrow more money for theirf education than ever More students are finding those funds in the form of risky, private student loans, where they pay the highesyt interest rates. Minority college students appear to be borrowing adisproportionated share.
“If this excessive borrowing continues, the consequences for studentz couldbe catastrophic,” the reports authors Erin Dillon and Kevib Carey said in a news release. “President Obama’zs proposed reforms to the federal studenyt loan program are a good stary to solvingthe crisis, but reformintg state and institutional aid policies, as well as creatinb incentives for colleges to restrain tuition costs are essential, particularlu in our current economic crisis.
” Some of the reason for the student loan the report said, are “out-of-contro tuition increases, lack of commitment to need-bases financial aid, and states and universitiesx increasingly spending scarce financial aid dollars on wealthy students.” If thesd trends continue, people will have less access to highed education, they’ll have increasing ratez of catastrophic loan defaults and they will have diminished life the think tank said. Borrowinfg has gone from being the exception for undergraduates in at only32 percent, to the As of 2008, more than 50 percent of studentsx at public, four-year universities borrowec for their education.
In for-profitr education, the percentage of borrowers rose to 92 percent in 2008 from 53 percentyin 1993. The average annual debt for borrowersxat four-year private universities increased by 70 percent over the study period, while the average debt for studentes at for-profit colleges increased by 57 percent, to $9,609 a year. Only 5 percent of undergraduateds borrowed private loansin 2003-2004. In four the percentage grew to14 percent. Between 2004 and the percentageof African-American students who took out privatee loans tripled, giving that group higher participation leveles than white or Hispanic students.
At private, four-yearr institutions in 2008, the wealthiest students receivee institutional grants of nearly equal size to those earnecd by thepoorest students.