Higher Ed Roundup: Week of March 17 – March 21

Students at Trade Schools Most Likely to Borrow, New Study Shows

Changes Ahead in Future Applicant Pool

Ed Dept. Officials Reassure Students of Loan Availability

Students at Trade Schools Most Likely to Borrow, New Study Shows

A new study by the U.S. Department of Education’s National Center for Education Statistics shows that students attending for-profit trade schools are by far the most likely to borrow to attend college. According to the report, entitled “Trends in Undergraduate Borrowing II,” nearly three quarters of proprietary school students took out a federal loan in 2003-04, compared to 53 percent of students attending private nonprofit colleges and universities. Meanwhile, 42 percent of students at four-year public colleges and 11 percent at community colleges obtained a federal loan that academic year. Overall, the report showed that federal loan borrowing is up among students in all higher education sectors, with most of that growth occuring in the unsubsidized loan program, which is available to all students regardless of financial need. The report did not, however, examine students’ use of private student loans to pay their college expenses.

Changes Ahead in Future Applicant Pool

The demographic boom in college bound students that began in the early 1990s is coming to the end this year, according to a new analysis of census data conducted by the Western Interstate Commission on Higher Education (WICHE). The report, “Knocking at the College Door,” estimates that the total number of high-school graduates will top off this summer at 3.34 million, before beginning to dip. The biggest drops in are expected to be among white and black students, while the largest rates of growth are projected to be among Asian and Hispanic students. By 2022, minority students are expected to make up nearly half of all public high school graduates, the report states. The changes are also geographic in nature, with substantial declines predicted in the Northeast and Midwestern states. College admissions counselors say that in the future they expect to focus more on Southern and Western states such as Arizona, Texas, and Florida, which have the largest projected applicant growth.

Ed Dept. Officials Reassure Students of Loan Availability

Speaking at a Senate hearing in Boston on Monday, federal officials said that despite the credit crunch, there is no reason for students and their families to panic about the availability of federal student loans. Deputy Secretary of Education Sara Martinez Tucker said that colleges and universities have “indicated no difficulty in lining up student loans.” Tucker and others at the hearing noted that lenders are expected to cut back on their private loan offerings. But Deanne Loonin of the National Consumer Law Center said that a slowdown in private lending, particularly to subprime borrowers, represented a necessary market correction, not a crisis. “To the extent there is a crisis for students today, it is that heavy reliance on loans to finance education means that many students come out of college buried in debt,” she stated.

While the Department does not expect a student loan crisis, Martinez Tucker assured Kennedy that the Department is keeping a close eye on the situation and that adequate safeguards are in place in case circumstances worsen. Her remarks echoed those her boss, Education Secretary Margaret Spellings, made a week ago while testifying before the House Committee on Education and Labor.