A Good Resource for Borrowing Students

The Link of the Day: Project on Student Debt

This website is great resource for all matriculates of [your college here] university, and provides lots of valuable data of the financial state of college graduates. The Project on Student Debt is a project, obviously, being executed by The Institute for College Access & Success (TICA). As far as I can tell, TICA appears to be pretty legit, independent of any commercial sway.

Although they are not neutral -- voicing opinions on Obama's FAFSA reform and the bailout -- though their only political objective appears to be making college more affordable. Spend a few minutes browsing and you're bound to find something to pique your interest, float your boat, butter your bread, etc.

For example, in data collected from government studies, they found that the percentage of undergraduates borrowing PRIVATE STUDENT LOANS went from 5 to 14 % from 2003 to 2007. From 2008 - 2009, this same statistic went from 14% to a whopping 43%. If you need an interpretation, take this one: THIS IS NOT GOOD, and here's why:

There are basically two types of loans, Federal and Private. Federal Stafford Loans are the safest bet if you're taking out loans. Subsidized (funded) by the government, they have a fixed interest rates, and do not begin to accrue interest until six months after graduation. In addition to these, there are Unsubsidized Federal Stafford Loans, which are just about as good, but accrue interest immediately.

Now, after these are private loans. They are often dangerous and deceptive, so be wary. They are really similar to credit cards, have variable (changing) interest, and interest much higher, sometimes more than double, Federal Stafford Loans. Be very, very careful if you look to private lenders for additional funds.

So, according to the data, 43% of all American undergraduates are now taking out these high-risk loans. Six years ago, that number read 5%. Wow.

Next Post: How you can avoid joining that 43% by getting more Federal Loans