Utah higher ed a bit pinched

Tuition hikes at nearly every college and university in the country may be imminent due to the current state of the economy. Consequently, paying for school is becoming increasingly difficult as private lenders become ever scarcer.

The predicament may be turning would-be students away.

Enrollment in Utah, however, is up, and loans are still being issued. The market is seemingly stable for students heading into college now and expecting debt when they finish.

"It's an incredibly important thing for students to have access to these loans," said David A. Feitz, director of the Utah Higher Education Assistance Authority. Market crises have all but shut down private lending, making loans available only to those with high credit scores.

UHEAA currently supports 161,000 student loan borrowers, with about $2 billion in assets. Default rates in the state, offered to students borrowing money for college, are among the lowest in the country at 2.8 percent.

"Although we are in the worst credit crisis in 100 years, we are prepared to weather the losses," Feitz said. The agency has endured a $17 billion swing in its budget from a $10 billion operating income to a $7 billion loss in the last year. Real losses result in only 2.5 percent because of reserve savings used to recoup the loss. Congress has cut student loan programs by about $40 billion in the past two years, furthering the meltdown of funds available for higher education.

The good news, Feitz said, is that UHEAA has been able to fund all student loans for the current school year, with virtually no funding delays for students. Even though there is less capital to come by, UHEAA's loan volume has increased 13 percent, along with an 8.5 percent enrollment increase among Utah's higher education institutions.

"We are among the strongest in the nation as far as lending goes," Feitz said, adding that although there are challenges, education is still in reach for anyone who qualifies.

But a recent nationwide survey of college affordability reveals that average tuition costs have increased by more than 60 percent since 2000, which means an extra $20,000 to $30,000 per year. The average student is graduating with more than $21,000 to pay off in school loans, according to the study performed by Myers Research and Strategic Service, based in Washington, D.C., earlier this year.

"This issue extends well beyond active college students and their parents," said Andrew Myers, company president. "It is a major part of our economic debate and could cause us to lose our competitive edge over other countries."