More US students forced into debt

The proportion of US students who took out loans to pay educational expenses has risen by nearly 50 per cent in the past ten years as the cost of attending universities has outpaced the availability of grants and scholarships, according to a government report.

Its publication coincided with plans to cut federal spending on student grants to offset defence and other costs and to curb the soaring budget deficit.

The report, by the National Center for Education Statistics, concludes that the proportion of full-time students resorting to loans to pay for university expenses rose by half, from 30 per cent in 1990 to 45 per cent in 2000. The average amount they borrowed rose by nearly 60 per cent from $3,900 (£2,100) to $6,100 a year.

The figures include all full-time undergraduates still dependent on their parents - about half of the total US student population.

The increase in borrowing "has been one of the most dramatic changes in financial aid in the decade", the report says. The study did not include "prospective students who may have been discouraged by the price of going to college, found the available financial aid inadequate for their needs or were unable or unwilling to borrow the amount needed to enrol".

Meanwhile, The Washington Post reports that the government plans to reduce federal spending on student aid by $325 million in 2006 - a 2 per cent cut - bringing it below 2005 levels.