On August 11 College Board released the patterns of how the college graduates' debt continues to grow, although slower. The debts of student loans for university students have grown relatively slowly over the past four years, but in some cases the growth has been excessive.
Although the amount of accumulated debt of students in private and public universities has had a slow growth between 2003 and 2008 in some sectors such as private debt has increased rapidly. The report "How Much Are College Students Borrowing" analyzes data from the Study of Post-Secondary Student Aid (NPSAS) of the Department of Education United States.
Part of the problem is that students when taking student loans need to consider employment opportunities after graduation and what they may be earnings at that time. However, while some do, making project four hears ahead is hard. It becomes particularly harder when considering the current economic conditions.
In a press release College Board writes that in 2007-08, 39 percent of all students and 54 percent of all full-time students took out a student loan.
"Bachelor's degree recipients were more likely than other graduates to have relied on education loans. In 2007-08, 66 percent of bachelor’s degree recipients graduated with debt, including 62 percent who had federal loans and 33 percent who had borrowed from nonfederal sources. A much larger fraction of graduates of for-profit institutions relied on private loans.
"Increases in Debt Largest Among Students in For-Profit Sector
Much of the growth in borrowing evident in 2007-08 occurred in the private nonfederal loan market. These loans are less desirable than federal loans, which have interest rates limited by law and provisions for economic hardship. Federal loans also are eligible for the new Income-Based Repayment plan. The IBR plan ensures that federal education debt payments never exceed 15 percent of the borrower’s discretionary income and that any remaining debt is forgiven after 25 years."
The report also shows that among all students who graduated in the 2007-2008 school year, 41 percent graduated with debt.
College Board advocates for increased access to higher education.
Written by Armen Hareyan
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