.Editor’s note: The following article is the third in a series that looks at how well the University prepares students for life after college. Today’s article looks at students’ increased reliance on student loans.

Even though University sophomore Aaron Quick works four jobs, he said, he will have to take out student loans next year to afford tuition.

Quick also has two majors – biological chemistry and genetics, and cell biology and development. Quick estimates he works 35 hours a week and spends most of his remaining time doing homework. But he said tuition and living expenses are still too much, and he will have to borrow next year to stay at the University.

“It’s tough in so many ways,” Quick said. “I have a heavy work load and need to do a lot of studying. I feel like my whole schedule is planned out for me every day.”

According to recent data from the National Center for Education Statistics, college students such as Quick are relying more heavily on student loans to finance their education.

In 2004, almost half of all full-time undergraduate students took out student loans, with the average student borrowing $6,200 for the year.

University students took out 31,000 loans last year, for a total of approximately $200 million, a 50 percent increase from 2000, said Amy Lund Swalley, an Office of Student Finance associate director.

Because college tuition continues to increase, many students have no choice but to take out loans.

“The cost of college has gone up over the years, and the amount of grant aid has not kept pace with the increase, so students are turning to loans,” said Bob Murray, manager of corporate communications for USA Funds, the largest student loan guarantor in the country.

And unless there is a drastic change in public funding for higher education, student loans will only become more common, he said.

Quick said that he has relied on Pell Grants and work-study funds to pay for college the last two years, but that’s not enough anymore.

The average undergraduate student loan debt increased 66 percent from 1997-2002, from $11,400 to $18,900, according to the 2002 National Student Loan Survey, sponsored by the Nellie Mae Corp.

But students’ debt burden, the percentage of income they must set aside for loan repayment each month, has remained relatively the same, Murray said.

“People don’t often take into account increase in income and salaries,” he said.

Students should look at loans as a beneficial investment in their future, Murray said.

“You need to look at student loans as a tool, really as an investment with a return like better job opportunities and better pay,” he said.

Quick said that he thinks his student loans will pay off in the end.

“I feel like it’s kind of an investment I have to make to make it easier for myself in the future,” he said.

Borrowers beware

But students should still be cautious when they decide to borrow any money for school, Murray said.

“Many students don’t understand the obligation, and they don’t pay attention to how much debt they are accumulating; it’s a shock when they first get out of school,” Murray said.

Lund Swalley said many first-time student borrowers are naive about the process and don’t always realize what they are getting into.

“It’s very easy to think ‘take out now and worry later,’ ” she said. “I strongly encourage students to think seriously about the loan they are taking, because failure to pay it can seriously impact your ability to borrow in the future.”

Tom Schmidt, Office of Student Finance associate director, said taking out student loans can be scary for students and their parents.

“I have a daughter that’s a freshman in college, and it does scare me,” Schmidt said. “Some students are taking more than four years to get out of debt.

“It is a very scary thing.”

But there is some good news. In 1990, student loan default rates were as high as 22.4 percent. They were 5.2 percent in 2002, according to the U.S. Department of Education.

The best thing for students to do is become educated about the different types of loans and how they work, said Cathy Mueller, executive director of Mapping Your Future, a public-service organization that provides free information to students and families looking to finance college.

“When considering student loans, you should look for all the free resources first and determine if you’re eligible for grants or scholarships that don’t have to be repaid,” Mueller said.

But when loans are a necessity, the key is management, she said.

“Students need to make a conscious and informed decision about what they’ll have to repay after college,” Mueller said. “What I advise students to do is to look at the career choice they’ve made and see if that amount of debt is reasonable for that debt choice.”

Plan would hurt students

But if Congress accepts President George W. Bush’s 2006 budget request and eliminates the Perkins Loan program, students will be left with fewer options, Schmidt and Lund Swalley said.

Perkins Loans are need-based loans with fixed interest rates. They do not require student or family borrowers to have established credit histories.

“We need to maintain what programs are good,” Schmidt said.

Perkins Loans allow students who go into certain professions, such as teaching or nursing, to cancel their debt when they graduate, he said.

In 2000, 30 states had shortages of registered nurses, according to a report by the Health Resources and Services Administration. And by 2012, the U.S. Bureau of Labor Statistics estimates, more than 1 million new and replacement nurses will be needed.

Additionally, the National Center for Education Statistics reports millions of new teachers will be needed by 2008 to keep up with increasing K-12 enrollments.

Providing students with Perkins Loans encourages them to go into teaching or nursing occupations, Schmidt said.

“These loans have more cancellation provisions than any other loan out there, and they help us get teachers and nurses,” Schmidt said.

He urged students to contact Congress and let it know the Perkins Loan program is important.

After graduation

Students usually begin loan repayment six months after graduation, Murray said.

It takes the average student 10 years to repay his or her debt, he said.

But most monthly payments do not exceed 8 percent of a student’s income, Murray said, and there are flexible repayment options in which students can postpone or lower the repayment amount.

Some financial aid professionals agree that the importance of student loans will only continue to increase in the future.

Right now, loans make up 60 percent of financial aid funds, and that number will likely increase, Murray said.

Seventy percent of college students said student loans were very or extremely important in financing their education, according to the Nellie Mae Corp. survey.

Without student loans, Quick said, he would not be able to attend the University next year.

“My attitude is that I’ve gone as far as I can without taking out loans, and now, I need to,” Quick said.