Student debt is at its worst level in nearly 15 years and financial experts agree that in the future, students won’t be in a better position to pay off loans and cover college costs than those facing them currently.

The $23,000 that the average college graduate owes in loans is a product of state legislatures cutting higher education funding and universities increasing tuition, according to Christine Lindstrom, director of the Higher Education Project for the Public Interest Research Group. And Lindstrom says students’ average debt is actually higher than reported.

“There’s more debt out there because more and more students are relying on private student loans, but that data isn’t collected in any way so we don’t know,” Lindstrom said. “I wish I could say it’s the current economic situation, but this is a problem that we’ve been seeing over the last 10 to 15 years.”

Evidence of greater stress on students’ finances is everywhere. Applications for financial aid at the University have increased as well as national demand for information about financial aid.

According to Margaret Rodriguez, senior associate director at the University’s Office of Financial Aid, the University has responded by increasing need-based financial aid by 11.7 percent this year and introducing the Economic Hardship grant, which has provided $500 support for in-state students whose families are experiencing financial difficulties.

Despite these adjustments to compensate for the rising costs of college, increases in tuition can often be an obstacle in overcoming financial debt.

Michael Boulus, executive director of the Presidents Council, State Universities of Michigan, said higher tuition rates are the direct result of significant drops in state funding over the last several years. The state legislature allocated $316 million to the University this year, a 2.8-percent decrease from last year. Boulus said decreases in allocations have pushed the University to raise tuition to cover operational costs.

This year, tuition rates increased 3 percent for out-of-state students and 1.5 percent for in-state students. Though they were the lowest tuition increases since 1984, Boulus said the cost of education is becoming too expensive.

“We’ve lost our focus as a public good. (Higher education is) becoming more of a private good,” Boulus said.

The increasing costs of college have made financial aid a necessity for students with unmet needs. Those who do not receive sufficient aid are forced to search for other options to avoid debt.

“They’re either opting out of college completely or needing to work now,” Lindstrom said. “While some work is a good idea, too much has the opposite effect. If you’re working 30, even 40 hours (each week), you’re actually undermining (academic) performance.”

For students who cannot meet universities’ financial demands with their available funds and scholarship money, a recently approved addition to federal student loan options has improved options for government aid. The new income-based repayment plan that became available last year allows students to pay back their loans based on their earnings after graduation — instead of a set amount per month for a specified number of years.

Under most plans currently in use, students repay their debt over a period of 10 years. The income-based payment plan often extends the amount of time that students are paying off existing loans but protects them from defaulting on their loan payment due to insufficient funds.

Lindstrom’s Higher Education Project advocates causes such as the income-based repayment plan to confront the growing need to provide financial support to college students.

“We were able to take $40 billion away from banks and invest it in more Pell Grant aid for students,” Lindstrom said. “Now we need to pay attention to what we can do to decrease the default rate for recent college graduates.”

New information about financial aid programs is always in high demand, but as scholarships and loans become more crucial to students than ever before, websites like finaid.org and fastweb.com have expanded exponentially, according to Michael Kantrowitz, the publisher of both websites.

Kantrowitz said finaid.org receives five million visitors each year and fastweb.com has 50 million registered users. He added that the websites’ free information and planning tools satisfy a new niche in today’s market for prospective college students, for whom scholarship searches and completion of the FAFSA are just another part of the college process.

LSA freshman Ainsley Losh registered on fastweb.com to find scholarships and said that the website was beneficial to her search process. She added that the University didn’t offer her any financial aid packages when she enrolled this year.

“Michigan offered me nothing. I have a couple grants (and the rest is) all savings that my parents put away for me when I was little,” she said. “I have a scholarship through Burger King for a little bit of money. I looked around a lot and applied for so many scholarships, but that was the only one I got.”

For the University, Michigan’s state budget deficit will likely continue to take precedence over additional funding. Currently, Michigan is one of four states that allocates more money to corrections than to higher education.

Despite the apparent lack of scholarships and high demand for financial aid, both Boulus and Kantrowitz said they don’t expect increases in funding to lower university costs any time soon.

“Seven-eighths of students who apply for financial aid graduate with debt,” Kantrowitz said. “For the past two decades, loans have absorbed the increase in college costs, while grants haven’t really kept pace. It’s going to get worse over the next decade.”

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