Like money, optimism has been in short supply this year.
Universities lose money to buildings, projects and faculty salaries; students lose to higher tuition and fees.
But in Reston, Va., loan officers at SallieMae stand to gain thousands of dollars from Indiana's recession and students who crave a college degree.
Institutions like SallieMae offer alternative loans, loans administered through private institutions without the aid of federal subsidies.
The loans help students stop their own deficit spending caused by increased tuition, but they also promise higher interest rates. As more students use them, the debt they accrue grows, said Robert Zellers, the director of scholarship and financial aid at Ball State.
"As far as I'm concerned, it's a shell game, and they're always going to get you," he said.
Zellers said he didn't know specifically how much more debt Ball State students have acquired. One expert, though, said the loans could increase debt nationwide by 50 to 100 percent.
"It's pretty early in the process for undergraduates to get in such debt from those loans," said Tim Fitzgibbon, the chairman of the debt management committee at the National Council of Higher Education Loan Program.
Currently, alternative loans comprise about 6 percent of all financial aid, but their use has increased by about 325 percent since 1995, according to statistics from a report by the College Board, a not-for-profit organization composed of more than 4,200 schools, colleges, universities, and other educational organizations.
Over the past decade, all federal aid has increased by only 117 percent, College Board reported.
At the end of the year, the number of students at Ball State who use alternative loans will probably have doubled, Zellers said.
Increasing tuition may have fueled the increase, but other factors are working for alternative loans, Fitzgibbon said. First, fewer parents are using the federal PLUS loan and shifting the burden to their children.
Also, students can only borrow so much in federal loans, and that cap hasn't increased since 1992.
The Federal Stafford Loan, currently set at $2,625 for freshmen still dependent on parents, has not paid for a year of tuition at Ball State since 1991.
Sophomore, junior and senior dependents can borrow up to $3,500 in Stafford Loans, but the last time that covered all tuition was in 1997. Tuition has refused to remain stagnant, increasing by around 90 percent in the past decade to about $4,800 per semester in the 2002/03 school year.
Ball State President Blaine Brownell said he is hopeful the university can keep next year's tuition increase below double digits, but that is not his decision.
Instead, the 150 legislators in Indianapolis will effectively determine next year's tuition when they pass the state budget at the end of the General Assembly's session.
The session is scheduled to end April 29. The Senate will have its say in the budget process, and both chambers will ultimately decide on how much funding Ball State will receive.
Their decision will then determine how much tuition increases, which will then determine how much in alternative loans students will need.
Four institutions provide the bulk of student loans at Ball State: Teri Education Loans, Wells Fargo, Citibank and SalliMae. The interest rates on the loans vary, but all of them are higher than the interest rates in the Stafford Loan, which is used by most students, Zellers said.
The Stafford offers interest rates at 3.46 percent for students; a loan at Citibank carries an interest rate of 4.62 percent, though it may fluctuate every three months, said Mrs. Reinesch, a supervisor at Citibank (employees there do not release their first names.).
The difference in percentage points seem slight, but compounding interest can turn private loans into formidable foes, said Sandy Baum, an economist in New York who has studied alternative loans for about 20 years.
For instance, next year's freshmen at Ball State can expect to pay at least $12,920, though that number will probably go up because it based on this year's tuition.
Because of the cost, Fitzgibbon said it's reasonable to expect some students to borrow $6,000 in alternative loans, especially if their parents forego the PLUS loan.
But this $6,000, when combined with compounding interest, could cost students approximately $2,220 in extra debt.
"Every percentage point in interest makes a big difference when paying it back," Baum said.
Baum said she hopes the growth trend it temporary, but she's skeptical. She said only public policy would stem the growth of such loans.
Fitzgibbon doesn't expect the federal government to change the loan caps until next year.
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