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Monday, August 14, 2006

Students face mounting debt

DENVER - An increasing number of college graduates are getting a crash course in economics, thanks to the monthly payments they have to make on their student loans.

The trend is present at Fort Lewis College, where the number of graduates burdened with debt from student loans has grown by 11 percent since the 2000-01 school year.

Almost four out of 10 people who take out student loans won't be able to manage the debt burden, according to Student Debt Alert, a national campaign that seeks to raise awareness about the sharply increasing levels of debt.

"Thirty years ago, we were talking about one-third of students taking out loans to pay for school and two-thirds getting government grants. Now, it's totally flip-flopped," said Cory Nadler, a campus organizer for Colorado Public Interest Research Group in Denver. PIRG chapters around the country are sponsoring the Student Debt Alert project.

Nadler's group released a report last week that showed student debt rose much faster than inflation or even health-care costs over the last decade.

The average debt load for four-year college graduates who took out loans jumped 107 percent between 1993 and 2004, to $19,200. Over the same period, health-care costs jumped 56 percent, while inflation in the Denver-Boulder area was 38 percent. (The Denver-Boulder area is the closest area to the Four Corners studied by the Bureau of Labor Statistics, the government office that tracks inflation.)

"I think what this report highlights is that higher education is getting a lot more expensive than most other things in our society," Nadler said.

Jack Klumpenhower, a spokesman for Fort Lewis, said, "We do have a feeling that students are increasing their reliance on loans significantly."

Last school year, 60 percent of students had loans. In the 2000-2001 year, only 49 percent took out loans. The average debt load for Fort Lewis graduates who took out loans last year was $16,966, compared to $14,102 in 2001.

Students are turning to loans as state support declines, Klumpenhower said. The state gave about $5 million to Fort Lewis students in scholarships and grants in the 2000-2001 year, but state support plummeted to $890,000 last year.

At the same time, tuition was going up. The tuition increase is being held to 2.5 percent at all state schools this year.

The biggest problem is the growth of the private loan industry, said Elaine Redwine, Fort Lewis financial aid director.

Source: http://durangoherald.com/asp-bin/article_generation.asp?article_type=news&article_path=/news/06/news060812_3.htm

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