Tuition increases have become a trend among higher education institutes. Now, researchers are finding that students are borrowing more money than ever to cover those costs.
The Pew Research Center’s Social and Demographic Trends project found that between 1996 and 2008 the amount of students borrowing rose 8%. Students earning associates and bachelor’s degrees were borrowing about $5,500 on average, more than they were in 1996.
These students are not alone. The average 2009 graduate has a debt of approximately $24,000. So what’s the reason behind all this debt?
- More students return to school. The economy has been a large reason why more and more people are returning to school. That mixed with low incomes is leading to more students borrowing.
- Degree programs can take longer than four years. A 2008 analysis by the American Enterprise Institute found that both public and private schools are graduating just 37% of their full-time students within four years. Recent school budget cuts are leading to less faculty and available classes, this leads to to those five and six year plans.
- For-profit private colleges. If you haven’t realized it yet, online degree programs are on the rise. As more students attend these institutions, they borrow more money. 25% of 2008 graduates from for-profit schools borrowed more than $40,000. Students can avoid this trap by finding free online courses and attempting an online degree program before borrowing tons of cash.
If you’re considering getting loans, think about using federal instead of private loans. Hundreds of scholarships and grants are also available for students. Getting a college degree doesn’t mean you have to break the bank.