The science of borrowing

A new report released by the Pew Research Center found that more college students are accepting loans and in larger amounts.

The study found that in 2008, 60 percent of graduates with Bachelor’s degrees borrowed more than in 1996, when only 52 percent of students took out loans.

It also reported that among the 2008 graduates who borrowed, “the average loan for bachelor’s degree recipients was more than $23,000, compared with slightly more than $17,000 in 1996.”

In 1996, 60 percent of students at private not for-profit schools had an average debt of $19,852. Then in 2008, 72 percent of students at private not for-profit schools had an average debt at $28,039.

Additionally, more college students are attending private for-profit schools, where levels and rates of borrowing are highest.

Private for-profit colleges, like University of Phoenix, are schools that are run by organizations. Pew Research Center found that students at these schools are demographically different from students are public or private non-profit schools.

“Private for-profit school graduates have lower incomes, and are older, more likely to be from minority groups, more likely to be female, more likely to be independent of their parents and more likely to have their own dependents,” the report said.

Fatima Call, sophomore at California Baptist University, considers student loans the best type of loan.

“We take out loans for everything; for houses, for cars. I can cover my rent. I don’t have to pay for a car. Student loans are the best that you can take,” Call said.

She cited the low interest rates and way that they might be able to help build up a person’s credit.

“CBU is expensive. The economy is so bad that even if I went to a California State University school, I would probably not even be going without loans.”

Call has borrowed around $7,000 for this academic year. Since she is a sophomore, she will mostly likely borrow money for another two years. Call expects to borrow from $15,000 to $20,000 for her college career.

According to the Pew Research Report, “roughly one- in-ten graduates in 2008 borrowed more than $30,000. With standard loan terms, a student with $30,000 in debt will owe monthly payments of about $350 for 10 years.”

“It’s not easy to go to school. I don’t get paid a lot and you still have to pay for stuff,” Call said. “Paying for school is one issue, paying for supplies is another.”