The Los Angeles Times today reports that students are now being forced to take out more loans than ever to finance their educations. While ever-rising tuition costs are old news, the economic downturn is adding to the problem for those families who were lucky enough to have a little extra to put aside for college:
“Families may have fewer resources available to them,” said Matthew Reed, a policy analyst who wrote the Project on Student Debt report. “If families who six or 12 months ago might have looked to a home equity line or savings or investments for college, those sources might be tightening up a bit. If that’s the case, that might lead to turning to a federal student or parent loan program.”
The article reports that to help meet the rising demand for student loans, the federal government has extended legislation that raises the amount of unsubsidized Stafford Loans that students can take out for their undergraduate educations from $23,000 to $31,000.
When will we see that the solution to this problem isn’t simply doling out more loans? We are only digging ourselves deeper into debt and pulling more and more people away from public service and other low-paying, but worthwhile careers. Eventually, something is going to have to give, and, I can only be thankful that I graduated before things got this bad.
The Project on Student Debt has issued a press release noting that the cost of tuition, fees, room and board are rising higher than wages. This means, of course, that student debt levels are rising as well:
From 2006-07 to 2007-08, in-state students at public universities saw the biggest increase in tuition and fees at 6.4 percent, with room and board up 5.2 percent….Students at all types of colleges still faced higher prices than they did the year before, and student debt levels are rising as families try to keep up.
The Project on Student Debt has released its third annual report on student loan debt. The report shows the average amount of student debt at the national, state, and individual college level. One interesting finding: Average debt for graduates of 4-year colleges (both private and public) increased 6% from 2006 to 2007.
Read the report here.