LOUISVILLE — Kentucky college students borrowed a record $1.2 billion for higher education during the 2010-11 school year, and the average student will spend a decade shelling out $200 a month to retire their loans, new data show.
"We have achieved a college-going culture with our students," said Ted Franzeim, senior vice president of the Kentucky Higher Education Assistance Authority, or KHEAA, which administers financial aid programs in the state. "The good news is one of the issues we faced was low aspirations. I think that's really changed.
"The bad news is ... the supply of funding to support those students hasn't increased as that population has increased."
KHEAA data presented last week at the meeting of the Kentucky Council on Postsecondary Education shows college students in the state owe an average of more than $19,000 apiece, and student indebtedness is growing at a rate four times greater than the state's gross domestic product, with no end in sight.
"Basically, student debt is growing faster than the economy," Franzeim said. "As student debt increases, there's less money available to grow the economy."
The report was presented to the state Council on Postsecondary Education on the same day the council approved tuition increases at public colleges and universities for 2012-13 that were as high as 6 percent. The council said the increases were necessary because of continuing state funding cuts for higher education.
The data show that 58 percent of Kentucky college graduates had incurred debt for their educations. The state is the 43rd lowest for student debt, Franzeim said.
The answer is to increase the amount of direct aid to students, he said, so the well of grants and other state aid didn't run dry by February every year.
There recently has been renewed discussion about student loans in Washington, D.C., with congressional bargainers working to head off doubling of interest rates that will take effect Sunday on federal loans to 7.4 million college students nationwide.
College students who graduated in the United States in 2010 carried an average of $25,250 in student loan debt, according to the Project on Student Debt. At the same time, unemployment for recent college graduates rose from 8.7 percent in 2009 to 9.1 percent in 2010.
The Project on Student Debt is part of the Institute for College Access & Success, a non-profit independent research and policy organization on college affordability that is based in Oakland, Calif.
The KHEAA data showed the largest increase in borrowing for 2010-11 was to pay for two-year programs in the Kentucky Community & Technical College System. Franzeim said the increase probably was due to both students borrowing more and a large increase in enrollment.
On average, a community college student borrowed less than $500 in 2001, but the average amount has increased to $2,000 according to the latest figures, he said.