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

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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 througg the 2007-2008 academic year. The cost of attending a publix university has doubled over the pasttwo decades, causintg previously unseen costs of highet education. Family income and studenyt financialaid haven’t kept up with the increasin g costs, forcing students to borrow more moneu for their education than ever before. More studente are finding those funds in the formof unregulated, private student loans, where they pay the highest interest Minority college students appear to be borrowingf a disproportionate share.
“Ir this excessive borrowing continues, the consequences for students couldbe catastrophic,” the reports authors Erin Dillon and Kevin Care y said in a news release. “President Obama’ss proposed reforms to the federal studentr loan program are a good start to solving the but reforming state and institutional aid as well as creating incentives for collegesx to restrain tuition costsare essential, particularly in our current economic crisis.
” Some of the reasons for the studentr loan crisis, the report said, are “out-of-control tuition increases, lack of commitment to need-based financia aid, and states and universities increasingly spendintg scarce financial aid dollars on wealthy If these trends continue, people will have less accesd to higher education, they’ll have increasing rates of catastrophic loan defaults and they will have diminished life the think tank said. Borrowing has gone from beinvg the exception for undergraduatesin 1993, at only 32 to the rule. As of more than 50 percent of studentsat four-year universities borrowed for theie education.
In for-profit education, the percentage of borrowers rose to 92 percent in 2008 from 53 percen tin 1993. The average annual debt for borrowersat four-yeare private universities increased by 70 percent over the studuy period, while the average debt for studentws at for-profit colleges increased by 57 percent, to $9,600 a Only 5 percent of undergraduates borrowed privatee loans in 2003-2004. In four years, the percentage grew to 14 Between 2004and 2008, the percentage of African-American student s who took out private loans tripled, giving that group higher participation levels than white or Hispanifc students.
At private, four-year institutions in 2008, the wealthiest students received institutional grants of nearl y equal size to those earnec by thepoorest students.