Despite a growing number of options to finance a college education, students and parents are increasingly turning to loans.

Not only are students borrowing more money, but more of them are borrowing, according to data compiled by Nebraska’s Coordinating Commission for Postsecondary Education.

The news doesn’t sit well with Carna Pfeil, the commission’s associate director, who is concerned about the increasing burdens for college graduates and worried as well about those who are foregoing higher education altogether because of the cost.
From 1992 to 2002 — the most recent data the commission analyzed — loan borrowing increased 168.1 percent at all Nebraska public and private postsecondary institutions. Nationwide, borrowing increased 238 percent.

In 2002, the total federal loan volume at Nebraska public institutions topped $166 million, nearly two and a half-times what it was in 1992.

SHOULD WE BREAK THIS OUT?

Other data show:

n The numbers of students using an unsubsidized Stafford loan, which allows interest to accumulate while a student is in college, climbed much more sharply than those using any other type of loan.

n Unsubsidized borrowing increased 770 percent at the University of Nebraska campuses from 1992 to 2002. At state colleges, meanwhile, unsubsidized borrowing grew more than 1,737 percent, and at community colleges, more than 807 percent.

n The average unsubsidized loan amount jumped from $3,167 in 1992 to $3,676 in 2002, according to the commission.

n The numbers of PLUS loans, also known as Parent Loan for Undergraduate Students, are on the increase as well. In 1992, the average parent loan was $3,057. In 2002, the average parent loan came to $5,058.

Students are relying on borrowing as college costs continue to rise and old strategies can’t keep up, Pfeil said.

“You used to be able to work enough through the summer if you worked real hard, but that’s just not something you can do nowadays.” she said.

At Nebraska Wesleyan, financial aid questions from prospective student continue to focus on loans, said Tom Ochsner, director of scholarships and financial aid.

Ochsner said he’s seen a large upswing in the use of loans based not on a student’s financial need, but on their credit rating. Students often turn to the loans after exhausting other possibilities, including federal loans.

Breaking the mentality that students today can pay for college as their parents did is tough, said Tammi Preston, the director of outreach services for EducationQuest, a nonprofit organization that works to improve access to college in Nebraska.

Preston and others at EducationQuest continue to push the necessity of a thorough scholarship search — even though it may be long and tiresome — to identify all other financing strategies before resorting to borrowing.

“It’s like going to the gym, or cleaning,” she said. “Just make yourself do it.”

A study released in October that examined savings habits found that parents largely overestimate the amount of scholarships and grants their children will get. The study also found that parents aren’t saving and instead are taking on debt to financie a college education.

Pfeil isn’t optimistic about the direction the lending numbers will continue to chart.

“I don’t see anything out there that will reverse or stabilize the increase in loans,” she said.

There is some good news amid the frenzy of borrowing. Students, who are often times looking at 10- and 20-year repayment plans, are continuing to report they felt the benefits of education outweigh the hardship of repayment, according to a report released in part by the commission in 2000.

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This entry was posted by Taman Siswa on Wednesday, June 27, 2007 at 2:16 pm and is filed under College Loans, Education News. Tags: College, Education News, Financial Aid, Grant, Loans, Scholarship, Student, Study, . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.