Students Often Shouldering More Financial Burden
> 4/12/2006 10:31:11 AM

A recent article by the New York Times identified a new and important trend in how students are funding their college educations. Tight family finances coupled with rising costs in tuition have created a situation where students are increasingly paying a larger portion of their schooling with loans, both federally funded and private.

More middle- and upper-middle-class parents are drawing similar lines, limiting what they will pay for higher education. While financing has long been a strain, parents seem willing today to pass more of the burden on to their children, financial aid officers say. Many are worried about affording retirement and say their fixed costs eat up their income. Others have not saved enough or are helping pay for care for their aging parents.

"What I've really seen in the last 10 years is a generational shifting of the responsibility" to pay for college, said Ellen Frishberg, director of student financial services at Johns Hopkins University in Baltimore. "Our parents helped us pay for school. These parents are not as willing to help their children pay for school."

Cited as a main statistic in this trend is the rising number of private loans, especially in comparison to federally funded education loans that are typically more stable with lower interest rates.

Although there are no statistics on whether those taking out private education loans are students or parents, financial aid officers said it seemed unlikely that parents could account for all of the increased private borrowing because they could get more favorable rates under the government program. They suggested that the private loan activity is indirect evidence of a phenomenon they have noticed anecdotally.

Of course, there is nothing inherently evil about students taking on more responsibility for paying for their education. The worry however, is that this will leave students with high levels of dept. Private loans are particularly tricky because they do not afford borrowers the same caveats that education loans do. Instead, with private loans, interest often accrues while students are still in school.

What we might draw out of these trends, is also an increased worry for students stress levels. High school and college have both become high stress environments for students, and that was before money and finance became major concerns. Now students know that they must not only work hard, but keep one eye on the bottom line if they are to make it to the university of their choosing. There are options out there, but recent cuts to federal funding haven't been helpful. Parents need to help their children work to find a college situation that will work for their future aspirations as well as their bank accounts. At the same time, we need to continue to push students to swing for the fences because only by continuing with that strategy will they have a chance at the billions of dollars of scholarship money that is floating around out there.

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