Study Shows that Saving for College is More Important than Ever Before

A recent independent study shows that saving for college is more important than ever.  Education Sector, an independent think tank analyzed 15 years of data through the 2007-2008 academic year (that's just last year!).  The findings: college students are borrowing more money than before and taking on risky loans to finance college. 

Some of the specific stats included in the report include:

• Borrowing has gone from being the exception for undergraduates in 1993, at only 32 percent, to the rule. As of 2008, more than 50 percent of students at public, four-year universities borrowed for their education. In for-profit education, the percentage of borrowers rose to 92 percent in 2008 from 53 percent in 1993.
• The average annual debt for borrowers at four-year private universities increased by 70 percent over the study period, while the average debt for students at for-profit colleges increased by 57 percent, to $9,600 a year.
• Only 5 percent of undergraduates borrowed private loans in 2003-2004. In four years, the percentage grew to 14 percent.
• Between 2004 and 2008, the percentage of African-American students who took out private loans tripled, giving that group higher participation levels than white or Hispanic students.
• At private, four-year institutions in 2008, the wealthiest students received institutional grants of nearly equal size to those earned by the poorest students.

A Baltimore Business Journal article from July 9, 2009 covers the findings with more detail.  You can read the full EducationSector study here.

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