A new report says college students in America are a trillion dollars in debt. Kentucky has seen a similar increase where annual student-debt climbed from $324 million in 1999 to almost $1.2 billion a decade later. Erin Klarer, who’s a vice president with Kentucky Higher Education Assistance Authority, still says taking on such debt can sometimes be the right choice.
“You know we don’t want to blanket that all debt is bad but we do at KHEAA we want to encourage responsible borrowing,” said Klarer.
The Kentucky Higher Education Assistance Authority manages most of the loans provided students by the state. Klarer says today’s slower economy has students taking out bigger loans. Fewer students can find part-time jobs and can only finance their education with a loan.
“Now if they’re not working they’re able to go during the day or for longer hours, and that person, especially if they are not working also qualifies for more aide,” added Klarer.
These figures do not include credit cards which students use to finance text books, tuition, and college fees. The trend worries Klarer.
“We find that very troubling…trend…especially when these credit cards can have interest rates that are far, far higher and more dangerous than any student loan,” said Klarer.
Klarer says the Authority would like to see more universities offer debt counseling for delinquent borrowers who are trying dig out from a student debt.