The number of students taking out private loans for education is growing rapidly, despite the fact they often are more expensive in the long run.
Borrowing through private loan programs for higher education totaled $17.3 billion in 2005-06, which, adjusted for inflation, is an increase of more than 900 percent since 1995-96, according to a new report on private loans by Jacqueline E. King, director of the American Council on Education Center for Policy Analysis.
Private loan borrowing accounts for 20 percent of all education borrowing, according to the report.
"A lot of times (students and parents) think it might be quicker to do a private loan, even though it's more expensive," said Suzanne Pittman, director of financial aid and assistant vice president for enrollment management at Georgia College & State University.
To qualify for a federal loan, students must fill out the Free Application for Federal Student Aid, better known as the FAFSA. The application takes about an hour to fill out, and then the government and college have to process it, which could take weeks, Pittman said.
"Some people think that process is too cumbersome and complicated," she said. "Sometimes you may have students or families who wait until the last minute to do anything about financial aid, and they think they don't have enough time."