Written by:
Raja Goel

Students Look to Government for Loans to Pay Rising Tuition

According to the Wall Street Journal, new data suggests that more college students are leaning more towards federal student loans rather than private loans to pay for college as the cost of tuition continues to rise. On Tuesday, October 21, 2009, College Board released data that indicates that the volume of private student loans dropped 52% in the 2008-09 school year. During the 2008-09, families borrowed an estimated $11 billion in private loans, a sharp decline when compared to the $22.8 billion taken out in the 2007-08 school year.

The government has taken action to help boost student lending in federal programs. According to College Board, federal-loan volume increased 15% to about $84 billion. In this rough economy, more families qualify for loans in part to the fact that more parents are losing jobs. This compounded with the fact that tuition costs rose 6.5% in 2009-10 to an average of $26,273 in private four-year schools. Patrick Callahan, the president of the National Center for Public Policy and Higher Education, describes the trends mentioned above as “disappointing” and claims that the increase in tuition costs only undermines the efforts put forth by the federal government to make college affordable for families.

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