More students relying on private loans
New research shows that when it comes to managing their personal finances, students are making riskier choices with regard to funding their educations.
According to a report from the Project on Student Debt, 64 percent of undergraduates who took out private student loans did not maximize what they could borrow from federally-based loans. Lauren Asher, who is president of the Institute for College Access & Success, which acts as the home of the Project on Student Debt, noted that private loans are one of the most risky ways to fund an education.
"Both the federal government and colleges should do more to prevent students from taking out unnecessary private loans," Asher said.
In its findings, the Project on Student Debt noted that like credit card debt, many private student loans are based on variable interest rates. They also do not have the same protections as federally-based student loans.
Along with more private borrowing, a recent study from Sallie Mae shows that college students are becoming more reliant on credit card debt. In 2008, around 30 percent of students incurred credit card debt by using plastic to cover their school tuition, which is up from 24 percent in 2004.