College loans put a strain on students and parents

BY REBECCA D. O’BRIEN, STAFF WRITER
The Record
[…] Last year, new student loans exceeded $100 billion nationwide for the first time. Total loans outstanding will exceed $1 trillion this year. Students today borrow twice what they did just a decade ago, and Americans now owe more on student loans than on credit cards.

In the meantime, more and more American borrowers are defaulting on their federal student loans. The national two-year default rate rose to 8.8 percent in fiscal 2009, from 7 percent in 2008, according to figures released last month by the Department of Education.

New Jersey, too, has seen a rise in defaults, though its rate is below the national average. In 2009, New Jersey’s schools saw a borrower default rate of 7.8 percent, with 66,069 entering repayment, and 5,203 in default, up from a 7 percent default rate in 2008.

In the past decade, the average debt of borrowers at New Jersey schools has risen along with the national average, from around $14,500 in 2000-2001 to nearly $23,000 in 2008-2009. This matches the steady rise in tuition, with many New Jersey schools nearly doubling in cost over the past decade. Almost two-thirds of New Jersey college students take on debt.

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