Student Loans Jump Record 50% at California Colleges : Education: Financing totaled $1.24 billion in the last six months of 1993. The increased indebtedness is linked to rising tuition and other campus costs, plus relaxed federal eligibility rules.

Faced with spiraling costs, California college students have been going into debt at a record pace to get through school, taking out a staggering 50% more in loans during 1993 than the year before, state financial aid officials say.

During the last six months of 1993, students took out $1.24 billion in new loans--compared to $822.5 million for the same six months of 1992. Meanwhile, the number of students taking out loans jumped 28%, from 249,000 to 319,000, statistics show.

“We’ve never seen an increase like this,” Samuel M. Kipp, III, executive director of the California Student Aid Commission, said Monday. The commission, a relatively obscure state agency, keeps track of and guarantees the so-called Stafford loans, which are made by private lenders but are backed by federal funds.

Kipp said students are being forced to go deeper into debt because other forms of financial aid have not kept pace with soaring college costs, including a succession of stiff fee increases imposed at California campuses in the past few years. Since 1989, annual fees have jumped 103%--to $1,440--at Cal State, and 128%--to $3,727--at the University of California.

In addition, he said, the federal government last year made it easier for California students to borrow money by relaxing eligibility requirements while raising the annual limits for the loans. Graduate students can now borrow an additional $1,000 a year, and juniors and seniors can get $1,500 more.

“I think it’s quite clear that more students are having to borrow to attend college and they are borrowing substantially more to meet college costs,” Kipp said. “People are going to be emerging from college, with or without their degrees, with a more substantial debt burden.”

Added Sen. Tom Hayden (D-Santa Monica), who chaired the Assembly Higher Education Committee for several years: “There couldn’t be a more clear example of robbing from the future of the next generation in order to support the special interests of people in power.”

Hayden said the increasing necessity and burden of student loans could discourage low- and moderate-income students from going to college.

“What’s the point of getting a degree, they ask, if you’re going to spend 10 years paying it off?” he said.

Tom Rutter, director of financial services at the 17,000-student UC San Diego campus, said ever-increasing amounts of student loans skews life decisions for those who do graduate. They may forgo graduate school or buying a home and bypass public service work because they worry about paying off the loans.

“If they are carrying around debt, they can’t do volunteer or low-pay work, like being a school teacher,” Rutter said.

Rutter said student loans at UC San Diego--where fees, books, and on-campus dorms cost a student nearly $13,000 a year--nearly doubled in two years, to $20 million.

At UCLA, student loans also increased, from $30 million in 1990 to $47 million in 1993, said Larry Burt, financial aid director.

Burt said the growing need for loans to keep up with college costs, which average $11,283 a year for undergraduate students living on the Westwood campus, may force them to lower educational expectations and stay away.

“They won’t be all they could be, they won’t go to the most challenging academic institution because they have to go to a cheaper one,” he said.

But, he added, the prospect of taking on increased debt does have one advantage. “We’re beginning to see students graduate more quickly. It just costs too much money.”