The Great Recession's Toll on Higher Education

The tight economy has forced many students to fight for an affordable, quality education.


So Gartrell persuaded his parents to pony up the extra money needed to switch to the University of Oregon. Now, though he is grateful for what he feels are better classes and advisers, he admits to suffering from survivor's guilt. "A lot of people don't have the opportunity to go out of state" because they don't have the grades or the ability to scrape together an extra $15,000 a year for tuition, he says.

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Given the higher tuitions and dwindling scholarship coffers, students and parents have little choice but to take out more loans. In the first semester of the 2009-10 academic year, college students took out $35 billion in federal Stafford student loans, up nearly $6 billion from the fall 2008 semester. And the amount borrowed by parents through the federal PLUS loan program jumped 50 percent to $3.6 billion. Financial aid officers say they expect the federal student loan binge to continue. The upshot: While today's graduates with loans typically join the workforce owing about $20,000, students who are currently maxing out their federal student loans will graduate owing more than $27,000.

Luckily for borrowers, the federal government has continued to lend even as banks collapsed or reined in lending during the credit crunch. And in the last year, the government has launched a far-reaching reform of the student loan system that greatly reduces college debt burdens. Once borrowers leave school, they can consolidate all their federal loans into a single obligation and apply for "income-based repayment," which caps their monthly bills at 15 percent of disposable income. Those who work at public service jobs (such as teachers, social workers, or police officers) and make 10 years' worth of those affordable IBR payments can have the remaining balance of their federal student loans forgiven

Students are also finding creative ways to raise money for their education, and social networking plays a big part. Using new websites such as sponsormy­,, and scholar­, students can post pleas for donations. These electronic appeals are winning financial support from relatives, friends of friends, and a surprising number of strangers.

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Dorrian Lewis, a senior at Mission High School in San Francisco, remembers spending months in the fall of 2009 writing essays for scholarship contests. But she won only a few hundred dollars, nowhere near the $3,800 she'd need to cover tuition, books, and transportation to nearby City College of San Francisco. "I panicked for a little bit," she says. So she filled out a profile on ScholarMatch, a website for San Francisco Bay Area students started by Dave Eggers, author of A Heartbreaking Work of Staggering Genius. Within a few weeks, anonymous donors had contributed enough to cover her costs. Managers of the site say that many of the donors don't appear to be connected to the students but simply contribute $20 or $50 to help those who sound deserving. "We are under no impression that this is a silver bullet," says Eggers, who notes that only 11 of about 100 ScholarMatch students have received the full amount requested. "But this is one tool" that can help fill in financial aid holes caused by the recession, he says.

Meanwhile, many students are taking on activist roles to try to ensure that they and their peers get a stellar education. In the last two years, students across the country have taken over buildings, joined rallies, or marched to government offices chanting "Education is under attack, what do we do? Stand up, fight back!" to alert voters and political leaders to the dangers of tuition hikes and the watering down of educational quality.

Stuart Luther, a senior at Arizona State University who has had to borrow more each year as his school raised tuition, decided he had to do something when he heard the state was threatening to cut his school's budget yet again last year. He switched his voter registration from his home state of Arkansas to Arizona and joined a student-led voter education campaign to inform fellow Sun Devils about a referendum that would raise the state sales tax by a penny to stave off the proposed budget cuts. The referendum won overwhelming support in the conservative state.