Student Loan Debt
Like the automobile industry, the university education industry has used
credit to create new customers and sell them more expensive product.
With university tuition costs rising faster than other prices, many students
are encouraged to borrow money through any of several government-sponsored
loan programs. As a result, they graduate with incredible debt loads.
For example, in 2004, the annual tuition at the University of California,
Los Angeles (UCLA) was $6,585.52 for a California resident and $23,541.52
for a nonresident. That didn’t take into account housing, books, meals
or any other living expenses.
According to the University of Notre Dame, the average 2004-05 expense budget
for an undergraduate student included:
| Tuition and Fees |
$29,510 |
| Room and Board |
$7,590 |
| Books and Supplies |
$850 |
| Personal Expenses |
$900 |
| Transportation |
$500 |
According to the American Council on Education:
More students are borrowing to pay for their college education, up from
49 percent in 1993 to 65 percent in 2000. Students also borrowed more. In
1992-93, the median amount borrowed was just over $9,500. In 1999-2000, that
amount jumped to $16,500.
While the Council’s studies showed that most students who graduated
in the class of 2000 have a debt burden equal to seven percent of their income,
the Council warned, “Debt burden is a growing concern for a subset of
students with larger than average debt or lower than average earnings.”
Furthermore, “Debt burden will increase if borrowing levels continue
to rise, interest rates climb or recent graduate salaries decline.”
Next: Increasing
Mortgage Debt |
