Posted on 09/02/2009 9:54:35 PM PDT by Lorianne
Heavy Debt Loads Mean Many Young People Can't Live Life They Expected __ Students are borrowing dramatically more to pay for college, accelerating a trend that has wide-ranging implications for a generation of young people.
New numbers from the U.S. Education Department show that federal student-loan disbursements—the total amount borrowed by students and received by schools—in the 2008-09 academic year grew about 25% over the previous year, to $75.1 billion. The amount of money students borrow has long been on the rise. But last year far surpassed past increases, which ranged from as low as 1.7% in the 1998-99 school year to almost 17% in 1994-95, according to figures used in President Barack Obama's proposed 2010 budget.
The sharp growth is "definitely above expectations," says Robert Shireman, deputy undersecretary of the Education Department. "But we're also in an economic situation that nobody predicted." The eye-opening increase in borrowing is largely due to the dire economic environment, which is causing more people to seek federal loans, he says.
The new numbers highlight how debt has become commonplace in paying for higher education. Today, two-thirds of college students borrow to pay for college, and their average debt load is $23,186 by the time they graduate, according to an analysis of the government's National Postsecondary Student Aid Study, conducted by financial-aid expert Mark Kantrowitz. Only a dozen years earlier, according to the study, 58% of students borrowed to pay for college, and the average amount borrowed was $13,172.
(Excerpt) Read more at online.wsj.com ...
FOOLS.
we really need to do something about this student loan nonsense. we keep giving more and more student aid but tuition goes up and up
We’ll just give out more in student grants and interest-free loans. That willl work, right?
Actually very little money today is being loaned directly to students. I had to cosign for about 90% of my son’s loans last year.
ANYTIME government gets involved.....costs go up....
It will be even worse this year. Financial aid applications are up 54% so far this year at my school, and there’s still 10 months left in the academic year. Obama’s economy is to blame.
Student loans are a form of indentured servitude. The Federal Govt is aiding by backin them up. If loans dried up, the schools would have to lower their tuitions.
None of the big name schools..state or private have any incentive to keep down tuition. They have underutilized assets..meaning that at the university level schools should run 12 months of the year and keep their expensive buildings full. Profs should either pay for themselves with kids enrolled, or meaningful research. Undergratuate education is the cash cow of higher ed. They don’t supply value for money.
Combine news like this with the announcement by the University of Texas that it would no longer participate in the Merit Scholar program.
“UT had 281 National Merit Scholars enroll as freshmen last year, second only to Harvard’s 285.” http://www.washingtonpost.com/wp-dyn/content/article/2009/09/01/AR2009090103930.html
The scholarship dollars are being switched to “need based”. Sends a great message to the kids.
Another consideration is that most prepaid tuition plans are running in the red. Think about this for a second. A fund supposedly managed by professionals cannot deal with the ever increasing cost of tuition - how do they expect parents with their woefully inadequate 529s to manage the situation any better? No wonder that Iowa State students are coming out with an average debt load of over $30,000 (one of the highest in the nation).
I don’t know how it is in your neck of the woods, but we have both Maymester and Summer School at our public colleges. It seems like we have a significant number of offerings (some even being critical path courses like Organic Chemistry).
You don't suppose there is a correlation there, do ya?
well, we’re stimulating demand this way and it doesn’t really increase supply.
Oh good news — the Obama administration is lowering the interest rate on student loans.
You only get to refinance your loan once — get the financial aid counselor at your college to let you know when it hits bottom.
That’s what the FA counselor told me.
Here’s when it will happen.
When hell freezes over. Our kids are screwed.
My nephew paid his own way through college by working his butt off and saving his money. When he got his degree he found that he had actually spent four years and alot of money learning how to BS his leftist professors into believing that he actually agreed with their Trotskyite crap and to get something to hang on a wall.
About six months after he graduated he enrolled in a school that teaches motorcycle maintenance. He is so talented at it that BMW offered him a full scholarship to attend their maintenance school and then offered him a job working on the motorcycles of their racing team. He is making more money then a brain surgeon, traveling the world all expenses paid and is enjoying himself immensely. When he tires of traveling and wants to settle down he knows he can go anywhere and make a very good living.
What ever happened to working to pay for your college instead of borrowing?
That’s how everyone I know paid for their education.
It is a pretty tough choice for a young adult to make. I certainly wouldn't loan money to a person that doesn't have any assets, a job and any credit history without some form of guarantee.
Yep, student loans are a bad bet - they aren’t discharged through bankruptcy.
In a few years when the hyperinflation hits, that'll be the per-student figure.
Today, two-thirds of college students borrow to pay for college, and their average debt load is $23,186 by the time they graduate
That's not so bad. Keep your belt tight for a couple of years and you can pay that down pretty quick.
Sweet! I love stories like that.
I am not surprised at all. Hell, I worked two jobs to get myself through an undergraduate degree, and three to keep myself in grad school. My current crop of freshmen think that they are too good to work at all — even part-time or work-study — whole in college. It cuts down on their party time.
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