Kelly Fryberger

More than half of Miami University students use loans to pay for college, and with the economic crunch, that proportion of the student body is expected to increase.

According to Chuck Knepfle, assistant provost and director of student financial assistance at Miami, the number of students applying for financial aid has increased by 400 students.

Out of Miami’s approximately 14,400 undergraduate students, 53 percent currently benefit from a loan, according to Jody Cosgrove, assistant director at the office of student financial assistance.

Cosgrove said the place to start when applying for a loan is filling out a Free Application for Federal Student Aid (FAFSA). From there, the school will classify students as dependent or independent, which determines the bracket for loan money one is eligible to receive.

“Students who are dependent can receive between $5,500 and 7,500 … students who are independent can receive between $9,500 and $12,500, depending on their grade level,” Cosgrove said.

However, Knepfle said that filling out FAFSA does not always provide students with enough money.

According to Knepfle, 19,209 students have filled out FAFSA in 2008 for Miami, although not all these students end up enrolling.

Knepfle said even after filing a FAFSA, some students need more money than they are initially awarded.

“Almost one-quarter have asked for an appeal,” Knepfle said. “Families (are defining) themselves in a worse financial situation this year.”

And with some parents unable to shoulder the burden of a student’s tuition due to unemployment or other economic factors, Knepfle said more and more students are requesting loans themselves.

“Mostly, it’s that parents cannot take on loan debt they were able to before,” Knepfle said.

However, the market for student lending is looking slimmer each year.

According to Jeff Wallace, director of marketing and operations at Student Lending Works, Ohio’s nonprofit student loan lender, 130 private lenders have dropped out of the marketplace in the last year.

According to Wallace, private lenders are struggling because banks have increased their credit requirement dramatically.

The challenge is that a shrinking number of private lenders need to answer to a growing number of students looking for loans.

“We’ve had an increase all year in students applying for loans,” Wallace said.

For students looking for private loans, Wallace said students must go through a bank. He said links to certain banks are provided on Miami’s office of student financial assistance Web site, at

“To find a private loan, I’d suggest going on the Internet and hunting,” Wallace said.

According to Knepfle, the market for loans doesn’t look as if it will improve.

Knepfle said the number of students in need of loans will continue to increase in the next few years.

“I think it could skyrocket,” Knepfle said.