Let’s get the bad news over with, shall we?
The title subtly hints at the plot: Drowning in Debt: The Emerging Student Loan Crisis is a report from the Washington think tank The Education Sector. Their data is from the National Postsecondary Student Aid Survey. The authors, Erin Dillon and Kevin Carey, found a slight increase from 2003-2004 to 2007-2008 in the proportion of students who took out loans. This isn’t really the bad news, though; the problem was that Dillon and Carey found that students are borrowing more, on average and that they are using private loan companies considerably more; up to 14% from 5%. The authors blame this on escalating tuition costs, and say the proposed changes designed to make federal grants and Perkins loans more widely available will not help this situation.
The National Consumer Law Center released a report this spring on private student loans, which also sounded the alarm about increasing student use of these services. Private loan servicers are not regulated as heavily as other private loan institutions. In addition, private loans are more expensive, with interest rates ranging from 11.5% to a credit-card-like 19%.
Patricia Steele, a research associate at the College Board, disputed the “hype” in the Education Sector report, saying that half of students don’t use any loans at all. Detractors point out that for the students who do take out loans, the ensuing effects on their lives and society matter quite a bit. Part of the problem seems to be how the numbers are crunched, and how well the students do post-college: Are their student loan payments a small detail as they find jobs and establish themselves financially, or are they burdensome, especially when the borrower is out of work or in other financial straits? This Chronicle of Higher Education article is considerably more cheerful, stating that while 65% of students leave higher education with debt, the average total is $20,000 — a chunk of change, but not overwhelming. About 8%, however, have totals of $40,000 or more.
On the upside, colleges and universities have responded to the economic situation by increasing the availability of institutional financial aid and reassessing pricing structures. As a result, most students are going to the sort of institution they think will be best for them, whether private or public, in-state or out-of-state, according to Maguire Associates, an educational consulting firm. The firm twice surveyed seniors, once to see what sorts of institutions to which they were applying and which they preferred, then again in May 2009, to see how the students’ plans had panned out.
The situation may be different for the younger brothers and sisters of the initial survey group. High school juniors were also surveyed early this year, and will be queried again when college enrollment time is neigh. Maguire Associates reports this group, with their university application process more steeped in the recession, is considerably more uncertain about their future prospects.
This week, Inside HigherEd features articles on the growth in Chinese applicants; students from virtual high schools and an analysis of which student aid programs really work.
A selection of college housing and student affairs headlines from 
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