The number of U.S. students who borrow money for college continues to climb, while the number of graduates who are paying off these loans is slipping.
A new report by the Department of Education found that 64 percent of grads from the class of 2008 borrowed for college, compared with 64 percent for the class of 2000 and 49 percent for those graduating in 1993. The average amount that the students borrowed has continued to spiral up, rising from $14,000 in 1993 to $24,700 in 2008.
While the debt load was larger for the later graduates, they were less likely to have begun repaying their college loans a year after graduation. Sixty percent of 2008 grads were repaying their loans a year after receiving their degrees compared to 65 percent for the 2000 grads and 66 percent for the earliest grads in the study.
A larger number of the most recent graduates, at 31 percent, faced high monthly loan payments -- defined as amounts that were greater than 12 percent of their income -- than their counterparts who graduated in 1993 and 2000 (22 percent and 18 percent, respectively.)
Whether students borrowed for college was partially dependent on what type of institutions they attended. For the most recent graduating class that the report covered, 90 percent of students attending for-profit schools took out a loan, compared with 62 percent who graduated from public universities and 70 percent who attended private, nonprofit schools.
Thursday, October 24, 2013
Moneywatch: More U.S. students borrowing for college
Moneywatch recently released a report stating that more American students are borrowing student loans to pay for college. This trend is problematic because most graduates do not obtain high-paying entry-level positions that enables them to repay the student loan debt.