WASHINGTON Jan 30 Tuition and enrollment levels
will likely continue to rise this year at colleges across the
United States, and private student lending will struggle to keep
up with the growing demand, Fitch Ratings said on Wednesday.
Private loan origination volumes will increase modestly but
still remain low due to the exits of several large lenders, the
ratings agency said. It added that other factors such as static
federal loan limits and legislative proposals to change the
dischargeability of private student loans will make credit less
Private student loan origination volume was $8.1 billion in
the 2011-2012 academic year, up slightly from $7.9 billion a
decade earlier, Fitch found. That was still 68 percent below
peak origination levels seen in 2007-2008.
As President Barack Obama's administration seeks to
strengthen financial protections for college students, it has
sought greater ways to provide aid through the government.
Fitch said that total student aid has grown at a compound
annual pace of 7.7 percent over the last 10 years. Fitch found
that in the 2011-2012 academic year the federal share of student
was 73 percent, up from 67 percent a decade earlier.
That could make financial aid "more susceptible to
government spending cuts," as the U.S. Congress works on
reducing the country's budget deficit, the agency added.