The cost of attending public universities has doubled over the past two decades, but family income and financial aid rates have not kept pace, creating “unprecedented heights” of education debt, this report says.
Several graphs display the borrowing habits of students in recent years. One, for example, shows an increase in unmet financial need from 1992-1998, disproportionate to the amount of money students can borrow through subsidized federal loan programs. “As a result,” the report says, “a multi-billion dollar private student loan market sprang into existence to fill the gap.”
Not only are students borrowing more than ever, the report says, but they are taking out loans with higher interest rates and less protection. Researchers fear that the continuation of these trends will result in “catastrophic loan default” or diminished access to education.
While the Obama administration has implemented changes to boost student financial aid, such as increasing Pell Grants, the authors of this report suggest that much more needs to be done. The report suggests that both federal and state governments work with colleges to refocus their financial aid strategies and reduce tuition hikes.
The Education Sector describes itself as a nonpartisan education think tank.
Free, six pages. www.educationsector.org/usr_doc/CYCT_Drowning_In_Debt.pdf.