Cash for college is tight

January 25, 2009 4:43:53 PM PST
The financial crisis and credit crunch are making it tougher for folks to secure money and that's making it harder for people going to college.[SIGN UP: Get headlines and breaking news sent to you]

Financial experts are calling it a nationwide crisis that will likely get even worse.

Lori Rosko is a graduating senior at the University of Houston and is majoring in accounting. Like so many of her peers, she depends on financial aid.

"I'm having to wait and I've already been approved for a private loan," she told us. "It's already been awarded to me and I still don't have my money."

That's because money for college is getting harder and harder to come by. It comes at time when tuition and other educational expenses are increasing by as much as 8% a year. That's double the rate of inflation. The recent credit crunch has lenders downright scared.

Lenders provided $19 billion to students last year. More than half of them have stopped lending money this year.

And the rest have made it harder to borrow.

"There is a monumental crisis going on right now," said Houston CPA Bob Martin.

Martin, a Houston certified public accountant, says kids in need of financial aid may have to rethink their plans if schools, states and donors continue to be strapped for cash.

"Some children are actually going to have to postpone college, possibly go to an in state college as opposed to an out of state college," he said.

The reality of it all is already having a profound impact on students at UH.

"It's definitely lessening student morale," said UH student Jerimy Craft. "I've noticed that just from the people I associate with on a day to day basis."

Rosko is trying to stay positive and focused on graduating. She is however seeking advice.

"I asked my advisor what I should do and she told me to keep working, even if it means prolonging graduation," Rosko said.

College students can expect to pay an extra 6% for tuition and fees next year.

According to The College Board, the average costs at private four-year university will be more than $25,143. The average price of a public four-year university is $6,585. Public two-year colleges will cost about $2,404.

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