State $$ sought for college loan aid

Utah ranks 43rd in the country in the money it allocates to need-based aid for college students.

That's one reason Utah System of Higher Education (USHE) officials will ask the 2006 Legislature for $1.67 million in new funds to help less financially fortunate college students.

The request is one the State Board of Regents will consider in its meeting this week — it comes amid talks about continually rising tuition and efforts to get families interested in saving for college sooner in a child's life.

Welcome to Utah's transition from a "low-tuition/low-aid" state to a "medium-tuition/low-aid" state.

"Borrowing for higher education expenses is just becoming a way of life for most students and families," said David Feitz, associate executive director for the UHEAA or Utah Higher Education Assistance Authority.

A recent report that looks only at the loan volume measured by the UHEAA — loan amounts at 37 public and private institutions throughout the state are included — showed an increase from $197 million in 2000 to almost $327 million in 2005.

Middle-class students who don't qualify for need-based grants are largely responsible for the steady increase in student loans, Feitz said. But even the impact of grants is eroding, he added, as tuition continues to rise.

Students at Utah's public institutions have seen a tuition increase each year since 1996-97. Another increase is expected for next year.

Meanwhile, the USHE reports that the number of Utahns who received federal Pell grants — awarded to the neediest students — increased from 29,561 in 2001 to 41,068 in 2005.

As more students seek loan assistance, their debt burden increases.

An average borrower who completed one year of course work in 1992 would have a debt of $2,323 compared with $4,095 in 2005, according to USHE.

USHE figures also show that since 2001, the average debt burden for four years of higher education has jumped 14 percent, to $14,049.

Feitz hopes state lawmakers will view USHE's request for more aid funds as an investment in human capital.

"We've got to keep pace with some level of expense for need-based grants and student loans," he said. "We're trying to build that level of support as we move forward."