New numbers from the U.S. Education Department show that borrowing is up among college students. According to a new report, students borrowed 25% more in the 2008-2009 academic year than they did during the prior year. That's $75.1 billion as the recession put a quadruple whammy on wanna-be college students.

The Recession Four-Part Punch
First, with almost 10% of Americans unemployed, a large number of parents can no longer afford to help their children with tuition bills. Second, credit is hard to get, so even employed parents can't access as many borrowing opportunities as they once could. (Save thousands of dollars on tuition with these tricks and little-known programs in Pay For College Without Selling A Kidney.)

Third, college endowments have taken a huge hit. Even the much vaunted endowments at Harvard and Yale have taken massive hits as bets on exotic and illiquid investments have gone sour, costing the schools about 30% of their nest eggs.

Fourth, the cost of college continues to rise at an astronomical pace, increasing some 4.3% according to a survey by the National Association of Independent Colleges and Universities, even as the rest of the nation views deflation as a bigger threat than inflation. The downstream impact of debt is teaching new lessons and changing the lives of college grads.

The Credit Band-Aid
Some students are choosing to stay in school longer, which often adds to the debt total. Many students rely on their credit cards to coving living expense, further adding to their debt burdens. By the time their academic careers come to an end, most students are carrying an average debt load of $23,186, which is nearly double the burden students carried just 12 year ago. That's about a $260 payment each month for the next decade.

Keep in mind that many students at private colleges and universities spend that much or more for a single year, and students with extensive post-secondary educations can easily spend in excess of $150,000. (Not all student loans are the same. Know what you're getting into before signing on the dotted line. Don't miss College Loans: Private Vs. Federal.)

To cover the debt, the grads need good-paying jobs, which are currently in short supply. The result is a class of graduates that is too mired in debt to afford homes, cars and other major purchases. That debt burden necessitates lifestyle changes, including renting an apartment instead of buying home, delaying marriage and the start of a family and sometimes even moving back home with mom and dad.

No Free Lunches
When the bills come due after four years of parties and freedom, it's a rude awakening to many kids who had vision of good paying jobs, houses in the suburbs and elaborate vacations. It's a wakeup call and a harsh lesson in reality. Our next generation of budding capitalists is learning that there are no free lunches in a laissez-faire society. (Want to learn more? Check out Paying For College In An Economic Downturn.)

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