Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 26, 1992 TAG: 9201240141
SECTION: BUSINESS PAGE: B3 EDITION: METRO
SOURCE: SANDRA BROWN KELLY BUSINESS WRITER
DATELINE: LENGTH: Medium
STUDENT LOANS AREN'T A SURE BET ANYMORE
If your child is in the first grade, you can expect to pay $17,697 a year for the youngster to attend a four-year public university when it's time for college.Higher education for a recent newborn is likely to cost $30,000 a year. Those figures are based on college costs experienced over the past nine years, said Buddy Johnston, director of financial aid at Radford University.
Two years at a Virginia community college costs about $5,300 allowing for the cost of housing, Johnston said.
Johnston well knows what has happened to college costs. He has a daughter who will graduate this year from Roanoke College, and he has worked in financial aid since before she was born.
He said he was lucky to be aware of the need to save for college and to have the help of gifts from grandparents. His daughter will graduate debt-free but with an empty savings account.
That college costs are rising is nothing new. But now they're going up at the same time that parents' are trimming how much they can save, mostly because they don't have as much discretionary money to put aside, Johnston said. He says PLUS, the government's parent loan program, has become "very, very popular in the last five to seven years."
The program allows a parent to borrow $4,000 a year and defer the repayment of loan and interest until after a child graduates. The current interest rate on such loans is 9.34 percent.
Another acknowledgement of families' strain to pay college expenses is that financial aid officers now can refuse to grant students federal loans.
Johnston, and other financial aid workers, said they are gravely concerned about the amount of debt young people have when they leave college. Because an average college indebtedness is $10,000 to $12,000, two students who meet and marry can start out together with debt second only to a home mortgage, Johnston said.
Because of worry that some students will leave college and not be able to meet loan payments, the government said that loans can be rejected if a financial aid officer believes the student's potential earnings will not be sufficient to enable the student to make the loan payments.
Johnston said he hasn't refused any loans and doesn't expect to, but that with graduates' bleak job picture in some professions, it's an option that's needed.