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Pew study More students borrowing more for college
MADISON, Wis. (11/29/10)--Undergraduate U.S. college student borrowing has increased dramatically in recent years, and credit unions are poised to help with several programs.
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Graduates who received a bachelor’s degree in 2008 borrowed 50% more--in inflation-adjusted dollars--than their counterparts who graduated in 1996. And graduates who earned an associate’s degree or undergraduate certificate in 2008 borrowed more than twice what their counterparts in 1996 had borrowed, according to a new analysis of National Center for Education Statistics data by the Pew Research Center’s Social & Demographic Trends project. Pew said increased borrowing by college students has been driven by three trends:
* More college students are borrowing. In 2008, 60% of all graduates had borrowed, compared with about half (52%) in 1996. * College students are borrowing more. Among 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. For associate’s degree and certificate recipients, the average loan increased to more than $12,600 from about $7,600 (all figures in 2008 dollars). * More college students are attending private for-profit schools, where levels and rates of borrowing are highest. Over the past decade, the private for-profit sector has expanded more rapidly than either the public or private not-for-profit sectors. In 2008, these institutions granted 18% of all undergraduate awards, up from 14% in 2003. Students who attend for-profit colleges are more likely to borrow, and they typically borrow larger amounts.
Credit unions have several programs available, including one from a CUNA Strategic Services provider, to help students and their families with financing the costs of college and to provide a way to attract younger members.
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Fynanz, Inc.--a CUNA Strategic Service provider--is a technology provider of custom private student lending programs and turnkey solutions. The company’s technology puts credit unions in the private student lending business without the need to purchase or install any software. The solution includes complete origination, underwriting, servicing and marketing. Fynanz also powers, a private lending marketplace. Since launching in 2008, Credit Union Student Choice has helped nearly 90 credit unions nationwide enter the private student lending market. The program will begin offering private consolidation and graduate business loan programs to its credit union clients in 2011, according to a company announcement earlier this month (News Now Nov. 5). CampusDoor, a provider of student loan solutions, systems and processing to lenders, offers Credit Union (CU) Student Help Smart Option Loans made by Sallie Mae. Through the program, students make payments while in school and graduate with less debt, compared with other longer-term private loan alternatives in which payments aren’t made until after graduation, the company said. For more information, use the links.
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