College Student Borrowing On The Rise: Pew Report

According to a new report from the Pew Research Center, members of the class of 2008 borrowed 50 percent more than those who graduated 12 years earlier.

The report reveals that the number of undergraduates borrowing rose from 52 percent in 1996 to 60 percent in 2008. Similarly, the average undergraduate loan increased from $17,000 in 1996 to $23,000 in 2008.

The rise in attendance numbers at private, for-profit colleges has caused the uptick in student borrowing, Pew reports:

Over the past decade, the private for-profit sector has expanded more rapidly than either the public or private not-for-profit sectors. In 2008, these institutions granted 18% of all undergraduate awards, up from 14% in 2003.2 Students who attend for-profit colleges are more likely than other students to borrow, and they typically borrow larger amounts.

Pew's findings come as no surprise. In August, the rate of American student loan debt outpaced credit card debt for the first time in history.

Many recent graduates have been left in the lurch by massive debt burdens. Northeastern graduate Kelli Space, 23, has so much debt -- $200,000 -- that she started a website asking for donations to help pay it off.

Below are some additional key findings from the report. For the full report, see here.

• One-quarter (24%) of 2008 bachelor's degree graduates at for-profit schools borrowed more than40,000, compared with 5% of graduates at public institutions and 14% at not-for-profit schools.
• Roughly one-in-four recipients of an associate's degree or certificate borrowed more than20,000 at both private for-profit and private not-for-profit schools, compared with 5% of graduates of public schools.
• Graduates of private for-profit schools are demographically different from graduates in other sectors. Generally, private for-profit school graduates have lower incomes, and are older, more likely to be from minority groups, more likely to be female, more likely to be independent of their parents and more likely to have their own dependents.

Are you in debt? What's your story? Weigh in below.

Comments

[Craigie7]

01:14 PM on 11/25/2010

If they are just looking across 2000, 2004 and 2008, though, things actually do not seem to be “on the rise.” The big increase seems to be during the years right after the introduction of the unsubsidized Stafford loan in the 1990s. In addition, the majority of people in postsecondary education do not complete a certificate or degree, so their numbers are not from a representative sample -- although such a "true" calculation is actually available from the same data source that Pew used . . .

Another non-crisis.

[Greenchilistew]

11:59 AM on 11/24/2010

The scam that is being run by these glorified diploma mills is the educational equivalent of toxic mortgages. This is nothing but fraud, and unfortunately the primary victims are those who can least afford the crushing debt loads they incur. These fraudulent “schools” could not exist without exploiting government backed grants and loans. Start by jailing some top officials at University of Phoenix, Strayer University, Kaplan Higher Education, and DeVry AND lower the percentage of government loans and grants that they receive, and magically the problem will go away.

[Barry Morris]

08:23 AM on 11/24/2010

Seriously, folks. I have been there. Think long and hard about the consequences and years of stress before you commit to borrowing a college student. In the long run, it might be better to just buy your own.

[landskroon]

05:15 PM on 11/23/2010

All Conservative Governments ruin the future for the normal people, by their choices they only serve their own short-term interest. All those Conservative ruled countries will pay their price in near future. Progressives make education available to good students for free, the result will be thier fortune. Education is the best investment one can make, pays better than any hedge-fund.

[rebel9999]

04:19 PM on 11/23/2010

BIG Education is nothing but greed. Why does tuition rise at 4 times the rate of inflation?

[75thRanger]

04:51 PM on 11/23/2010

Is anything anyone's fault anymore? Obviously not in the minds of most liberals. There are ways to get an education without going into debt.........if you are willing to make the sacrifices required to receive it. Take some personal responsibility and stop blaming "Big Education".

RLTW

[Pavane]

06:52 PM on 11/23/2010

And what are those ways, my friend?

As a parent who has lived in university-land [2 kids at 2 different Univ's] for the last 4 years, I have a REAL good idea about education/cost and it's relationship to everything from scholarships to internships to corporate hiring.

What I see is ... the competition out there is staggering. If one does not speak multiple languages or have had corporate internships on their resume, or studied abroad ... the chances of landing a decent paying job with a service or manfacturing corporation, or accounting firm, or law firm or museum are next to none.

The people who get hired are young, fast and sharp. Those lucky enough to have career jobs while continuing their education have two things going for them. 1) Their corporation willl likely help pay for their post-graduate education. 2) With every degree, they will continue to grow.

But a regular joe who starts late, let's say working at Walmart to pay for a class here or there, is probably doomed.

So, I am wondering what kind of advice or suggestion you are making. No snark. How does one get an education without going in debt, but have that education MEAN something against intense competition?

[rebel9999]

02:06 PM on 11/24/2010

received my graduate degree in 2005. I took personal responsibility. Thanks for your two cents.

[GomezAddams]

03:49 PM on 11/23/2010

Saddling the student with extreme debt ensures corporations of a new slave in the future.

[Opinionated1111]

03:29 PM on 11/23/2010

STOP GIVING STUDENT LOANS TO STUDENTS WITH LESS THAN A 3.0 (OR B) AVERAGE...

I would guess that a good 50% of student loans go to support four years of booze, broads and drugs........AND/OR college athletes with a 1.0 or D AVERAGE....

STUDENT LOANS SHOULD BE FOR EDUCATION - AND EDUCATION ONLY!

[sph272]

03:39 PM on 11/23/2010

If you'd look at how expensive tuition has become, I'm pretty certain you'd leave that assumption behind.

Student loans are for an education, but they can also be used to help with living expenses.

[Saheed O Osoba]

04:05 PM on 11/23/2010

What facts do you have to back that assumption up? booze broads and drugs? you think thats all the money is used for? nevermind the cost of rent (which goes up every year) or the cost of food, textbooks, daily living expenses (fuel, bills, etc.). I may be slightly dogmatic but I don't think students who use student loans use it only for "booze, drugs, and broads". as for GPA, you should take a look at the declivity the american education...i'm sure you've heard reports on tv and papers...

[Vantunow]

03:14 PM on 11/23/2010

Debt-Trap is the game. Has always been, will always be.

Those who can create money out of thin air, have only one skill, one weapon - setup debt-trap.

They do NOT need money. Why would they, when they can simply print it? What they DO need is your brilliance, hard-work, creativity and labor.

The leeches need a host. Federal/International Bankers are leeches, and we are the host.

They brainwash us into thinking WE are the one who are irresponsible, who have lost control of our lives, and that is why we have trapped ourselves in all these debts.

Meanwhile they figure our creative ways to make sure to lay debt-traps wherever they can, by controlling Housing Prices, Raising Tuitions, CC interest rates etc.

There is no eascape either. If most people decide not trap themselves in mortgages, they would raise the RENTS. If you go aborad to Carribbean or something for cheaper education, they would by out those institutions and get cheaper labor.

Our Government works for best interest of Federal Reserve and International Bankers.

We don't have iron chains on our hands and feet, but if you pursue the "AMERICAN DREAM", then ONLY way to achieve it is to sign away your labor for life.

Debt is the new slavery.

[happypatb]

02:50 PM on 11/23/2010

In an editorial in today's Wall Street Journal, the President of the University of Oregon mentions that college costs have risen 7.5% per year over the last 35 years. This is outrageous. Universities and colleges need to control their costs. I don't know why more people don't complain about the rising price of higher education, plenty complain about the price of gasoline but in the last 35 years the price for a gallon of gasoline has risen only 5.98% a year about 1.5% less than the figure cited for higher education.

[bthechangeyouseek]

03:09 PM on 11/23/2010

The costs are ridiculous. Many do complain, but if you want the degree, you will pay what it costs to get it. Many jobs today require a BS degree at minimum and prefer an MBA regardless of the job description.

[happypatb]

03:25 PM on 11/23/2010

True, students are in a pinch but the "trustees" of these universities are supposed to provide oversight--they or law makers (at least for public universities) should put the brakes on the costs. Having students graduate with exorbitant levels of debt is a drag on the economy and not good for either the students/graduates or the country as a whole.

[filosofer989]

06:07 PM on 11/23/2010

Elephant in the roo i s the ever-growing professors' salaries. Nobody wants to talk about it. Why cant they take pay cuts as in other professions? Same thing with ever-increasing doctor fees causing unsustainable Medicare and Mediacaid budgets. Again noone wants to challenge this. Why should certain professions be treated as if cutting their salaries is a crime when the entire economy is suffering?

[bthechangeyouseek]

09:09 PM on 11/23/2010

Many for profits don't employ full time professors. They use adjuncts. Bringing the real world into the class room. But you are right, all areas should be reviewed.

[Idean Salehyan]

02:10 PM on 11/23/2010

Basic financial literacy is really a problem in the US. Most college students I encounter have only a vague idea what interest rates, mortgages, IRAs, pensions, stocks, bonds, inflation rates, exchange rates, etc, are. This should be part of their core requirements. It is certainly as useful as reading Kant and Hume.

[Saheed O Osoba]

02:41 PM on 11/23/2010

true but this has nothing to do with the usury being performed by lending institutions and exacerbated by colleges neverending rise in tuition. economically i can't understand how record numbers of ppl are going to college now, and yet tuitioin is at an all time high. not only that but there are factors that rarafy the job market for graduates. the situation is incredibly bleak. a generation of debt slaves seems to b upon us.

[JustMeinNJ]

03:03 PM on 11/23/2010

In college (and even now) I knew nothing of finance. I'm not sure it matters.
I knew I needed a 401k, to pay myself first, rent 2nd, car ins. 3rd, and anything left - the rest of the bills.
I've had a few mortgages do date - and I did fine. I stuck with what I knew I could afford a month and something that was fixed and would neer surprise me.
Pensions? After 20 years of a career I've never worked anywhere that there would be a pension.
I took loans for college (and did recently > 40yrs old) - I never considered the debt - I just knew I had to have a degree...It was a long # of years after college trying to dig out...I don't see anything changed really - it's all the same. Job market is worse - not sure I'd go to college in this market - although everything turns around at some point.