Students are Borrowing More Money Than Ever Before

Dec 03, 2010 40 Comments by

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.

Categories:
Financial Aid, Student Loans

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40 Responses to “Students are Borrowing More Money Than Ever Before”

  1. David says:

    What are today’s average interest rates like?

  2. mary ann acker says:

    I have seen a lot of scholarships given to students that have high grades, whether on not they need it. It seems to me that the scholarships should go to the students who need the financial help. Some of the students with the highest grades are from very very wealthy families who have given them every advantage and do not need financial aid.

  3. Rose Marie Sella says:

    Maybe it is because the colleges encourage students to borrow the funds to attend their schools. I recently made some inquiries about going back to school for my masters degree. I was looking into online school and when I contacted them the first thing they talked to me about was financial aid.

  4. Jimmy Salvo says:

    Many lending institutions are sending out solicitations for student loans for college. They make it too easy.

  5. Ashleigh says:

    Wow – that’s a lot of debt! I thought mine was bad and I’m no where near those figures – but then again I’m in online classes too – YAY!

  6. mitch says:

    I guess I’m below average for my debt – glad to know. The way I see it though is – whatever I have to do to get my degree will be worth it in the end. I’m sure that’s how most people feel and that’s why they are willing to rack up all the debt.

  7. Mark Madwell says:

    I am getting ready to start school and need financial aid. After reading this I will be very careful about how much I have to borrow and pay back.

  8. Elizabeth says:

    It is amazing how quickly you can get into debt. The scarey part is that the way the economy is, you don’t know if you will find a job once you graduate.

  9. Simon S says:

    I know that if you get scholarships or grants for college, they don’t need to be repaid. How do you qualify?

  10. John Amarando says:

    I did not realize that after I graduated I needed to immediately start paying for my student loan. I graduated in June, but have not been able to find a job yet. Is there any way to delay the start of repayment until I get a job?

  11. Dan Rice says:

    I am in a terrible position. I took out a student loan, but did not complete my degree, cannot get a job, and am being dunned by the bank. Is there anything I can do?

  12. Michey Blanche says:

    Getting into debt is the easy part, it’s getting it paid off that is impossible. I recently took out a college loan to get my degree. Now I have my degree and cannot find a job, any suggestions

  13. Amy Foderman says:

    Is it possible to get an extension to start repayment of a college loan?

  14. Will Grants says:

    Are there any colleges that will counsel me on how to get out of debt?

  15. Gary says:

    Schools do encourage one to get student loans to complete their degree. And once you graduate you pay it back. But, if you have trouble finding a job, do the work with you to delay the start of paying it back?

  16. Scotty Binnett says:

    It is daunting to think that by the time you get out of school, you are so far behind the eight ball. How do you avoid it?

  17. Kevin Conners says:

    I am almost finished with college and have managed to get grants and scholarshps that do not need to be repaid. I hope I can finish without any loans.

  18. Tom williams says:

    I am getting ready to start school and looking for some ways to finance my education. Would I be better off with loans, or should I try for scholarships?

  19. Kendall says:

    I haven’t had to use any of my own money yet, and I hope that will continue to be the case. I go to college online and do A LOT of research finding the grants and scholarships. If you are willing to put in the time – that free money is out there.

  20. Norman says:

    Do you have to have good credit to qualify for student loans? I plan on applying for a bunch of other aid to but I wanted to know in case I need more money. Also, are you eligible for the student loans if you are going to school online?

  21. Sarah Robbins says:

    I had tried going to college twice and both times I failed. Now I have been working for a couple of years and I have decided that I want to take a certificate medical assistant course. What are my chances of getting scholarships to help pay for it?

  22. Robin Rester says:

    I am graduating high school in the spring. I am interested in getting a certificate as a plumber. Would I be eligible for scholarships?

  23. Ross Buchanan says:

    This is really goood information. I am looking for funding to go to college.

  24. Misty says:

    Great facts about scholarships. I will be needing some for my masters degree. I will put this information to good use.

  25. Vernon says:

    It always seems to me that it would be so difficult to get a scholarship. This is good information.

  26. Chardonay says:

    Do these scholarships ever pay for the entire tuition, including books?

  27. Education Connection says:

    Hey Chardonay. Yes it is possible to find scholarships that allow you to use the money for whatever your education needs including books, supplies and in some cases housing.

  28. Education Connection says:

    Hi Robin. Yes you would! Scholarships can be based on financial need, community service, future career choices and much more. If you need help finding scholarships check out Education Connection’s grants and scholarships page.

  29. Education Connection says:

    Hey Sarah. Your chances at scholarships are just as high as many others. Try finding scholarships that are need-based rather than those that require high GPAs. Scholarships are also available for specific career choices like the medical industry. Try finding ones you believe will be suitable for your needs. Good luck!

  30. Education Connection says:

    Hey Norman. Stafford and Perkins loans do not take into consideration your credit score, but most private student loans do look at your score. And yes student loans are available for online students who are attending accredited colleges and universities.

  31. Education Connection says:

    Hi Tom. Scholarships are a great option because you usually don’t need to pay them back!

  32. Education Connection says:

    Hey Scotty. This is probably one of the more difficult questions to answer. Scholarships and grants are great ways to fund your education without having to pay it back. It is also important to use your money wisely, save what you can and so forth.

  33. Education Connection says:

    Hi John. Some loans allow students to declare financial hardship and delay or minimize their payments. You’ll need to contact your loan company to find out what they can do for you.

  34. Education Connection says:

    Hi Gary. A majority of student loan lenders offer a grace period after you finish school or you may qualify for deferment of payments. Contact your student loan lender to see what you can workout with them, and good luck :)

  35. Education Connection says:

    Hello Amy. To get a definite answer you’ll need to contact your student loan lender. Many student loan lenders do offer different options such as deferment or forbearance.

  36. Education Connection says:

    Hi Michey. Have you contacted your student lender yet? You may be eligible to defer your payments due to financial hardship, which is an option. Unfortunately in this economy the best thing to do it don’t give up and keep looking!

  37. Education Connection says:

    Hey Dan. Have you tried contacting your student loan lender? They may be able to grant you a deferment on your loans or forbearance. Speak with someone as soon as you can to see what your options are.

  38. Education Connection says:

    Hey Will. Your financial aid advisor may be able to help you deal with your college debt and advise on what you can do to stay on track with your payments.

  39. Education Connection says:

    Hey Simon. Qualifications for grants and scholarships can vary. They can be based on GPA, community service, financial need, or just be based on a contest. Check out our grants and scholarships page for a list of grants and scholarships you may be eligible for.

  40. Education Connection says:

    Hi David. To answer that question I’d have to know if you’re talking about federal loans or private loans?

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