Federal Loans to College Students Rise to $9.8 Billion, Stir Concerns

Federal loans to college students have tripled in the last decade, ballooning to $9.8 billion annually in the 1985-86 academic year, raising concerns about whether the next generation of graduates will be weighed down with debt, according to a congressional report released Sunday.

“The rising cumulative debt of college students that is documented in this paper is disturbing,” Rep. David R. Obey (D-Wis.) and Sen. Paul S. Sarbanes (D-Md.), chairman and incoming chairman of the Joint Economic Committee, said in issuing the report.

The study raised the possibility that higher education debts can affect students’ career choices and postpone home buying, marriage and even the decision to have children.

And, it pointed out that as borrowing to finance education increases, students have less and less certainty about their ultimate ability to repay and what a manageable debt burden will be.

Undergraduates in particular face uncertainty about what kinds of jobs they will get, the report said.

The report, written by Janet S. Hansen, director for policy analysis of the Washington office of the College Board, found that while total aid to college students has remained relatively constant, there was a huge drop in grant aid, such as Social Security and GI Bill benefits, and a big increase in loans.

Hansen said that in the 1985-86 academic year, three-fourths of the $20.7 billion in total loan and grant aid to students came from the federal government. In 1975-76, loans constituted less than one-fifth of student aid.