| Over the last 10 years, not only have more | | | | currently carry college loans in amounts more than |
| undergraduate and graduate students been taking out | | | | double the national average. |
| student loans to pay for school, but they’ve been | | | | Borrower Education Lacking for Student Loans |
| borrowing exponentially more. | | | | Part of the problem, financial aid experts say, is that |
| While some authorities in higher education and financial | | | | many students pay little attention to their college costs |
| aid attribute this trend to students becoming | | | | and how much they’ll need to borrow in student |
| overborrowers — maxing out their federal college | | | | loans to cover those costs, particularly when it comes |
| loans and adding on private student loans just because | | | | to attending their dream school. |
| they can — others say the increase in reliance on | | | | “They want to be able to pay for the school they |
| student loans is due to the fact that college | | | | have wanted to go to for as long as they can |
| affordability has moved increasingly out of reach. | | | | remember,” says Mark Kantrowitz, publisher of |
| “It used to be that, 10 to 20 years ago, if you went | | | | FinAid.org, a student financial aid website. “And they |
| to a four-year public institution, had a low to moderate | | | | are willing to do whatever it takes.” |
| income, and worked a reasonable amount part-time in | | | | And rarely do these students get advised otherwise. |
| school, there was enough aid and public institutions | | | | Students receive little, if any, education from high |
| were better financed, so you could come out with no | | | | school guidance counselors or college financial aid |
| debt,” Lauren Asher, acting president of the Project | | | | administrators about the financial aid process or the |
| on Student Debt, told The Chronicle of Higher | | | | realities of student loan repayment. Often, students |
| Education. “That same student now would have to | | | | graduate without knowing what type of college loans |
| borrow to get their education.” | | | | they’ve taken out, how much student loan debt |
| Tuition Keeps Rising, Students Keep Borrowing | | | | they’ve racked up, what their student loan interest |
| College costs have soared in the past decade at both | | | | rates are, or how feasible it will be to pay off their |
| public and private institutions, with college students | | | | federal and private student loans with a job in their |
| across the country being subjected to near-yearly | | | | field. |
| tuition increases. In just the last year, even as | | | | Despite Drawbacks, Student Loans Remain a |
| unemployment has soared and retailers and service | | | | Worthwhile Investment |
| providers in every sector — from airlines to car | | | | Despite this overwhelming increase in student loan |
| dealers to clothing stores — have slashed prices in | | | | borrowing, most economists and financial analysts |
| response to diminished consumer spending and | | | | maintain that the difference in lifetime earning potential |
| contracting sales, tuition and fees at both two-year | | | | between high school and college graduates more than |
| and four-year colleges and universities have continued | | | | outweighs the costs of a college degree. |
| to rise. | | | | In 2007, the average college graduate earned about |
| For the 2008–09 academic year, according to the | | | | $57,200 a year, compared to the average high school |
| College Board, in-state tuition and fees at four-year | | | | graduate’s annual earnings of about $31,300 — |
| public institutions were up, on average, by 6.4 percent | | | | a difference of over 80 percent. Over a lifetime, |
| to $6,585, compared to the previous school year. | | | | college graduates typically earn $1 million more than |
| Out-of-state tuition and fees were up by 5.2 percent | | | | high school graduates. |
| to $17,452. Tuition and fees at public two-year colleges | | | | A student who graduates with $20,000 in debt from |
| rose by 4.7 percent to $2,402, and at four-year | | | | college loans should be able to make back at least |
| universities by 5.9 percent to $25,143. | | | | that amount within one to two years in the additional |
| Student borrowers have had to adjust accordingly. | | | | earnings afforded simply by virtue of having an |
| In 1993, fewer than half of graduating college seniors | | | | undergraduate degree, says Sandy Baum, a senior |
| had taken out student loans to finance their | | | | analyst at the College Board. |
| undergraduate education, according to the Project on | | | | The benefits of a college degree are even more |
| Student Debt. By 2003, that number had climbed to | | | | noticeable in the current recession: Although job losses |
| over 65 percent. For the students graduating with | | | | have hit both white-collar and blue-collar industries, the |
| student loans, the average student loan debt amount | | | | unemployment rate in May was 4.8 percent for |
| more than doubled in those same 10 years, jumping | | | | 25-year-olds with bachelor’s degrees, compared to |
| from $9,250 in 1993 to $19,200 in 2003. | | | | 10 percent for 25-year-olds who hold only a high |
| Today, about 8 percent of undergraduate students | | | | school diploma. |