The average UCSD senior will be in debt $14,500 with student loans after graduating this month, and the amount is likely to increase after interest rates for federal loans rise this summer.

The Department of Education and federal financial aid as a whole are taking one of the most severe cuts in the federal budget, according to UCSD Financial Aid Director Vincent De Anda.

On July 1, the Deficit Reduction Act of 2005 will impact students who use federal loans to help pay for college tuition costs. Passed by Congress in February, the legislation will increase the interest rate for the Stafford loan, UCSD’s most popular federal loan.

“There are some good [points] in the bill,” De Anda said. “It’s good in the sense that it increases the maximum amount a student can take out in a loan — but in the end, it’s just more borrowing.”

Fifty-four percent of UCSD undergraduates have federal or private loans. Between the 1992-93 and 2002-03 academic years, the percentage of bachelor’s degree recipients who used loans to finance their undergraduate education increased from 49 percent to 65 percent — with the average debt of $12,100 jumping to $19,300 nationwide.

Earl Warren College senior Dylan Seaton will become one of those statistics when he graduates this fall.

“I wish there was another way [to pay college tuition fees], but there really isn’t,” Seaton said.

UCSD’s Financial Aid Office is trying to accommodate the new changes. The Stafford loan offers two versions — the first is a federal-based loan, while the other is funded through private lenders. Unlike UC Berkeley, UCSD uses private lenders to fund Stafford loans.

“Some of our lenders offer benefits, and we get better rates than we can get from the federal program,” De Anda said. “Because these lenders are competing, they’re taking some of their profits and returning them [to students] in reduced rates.”

Previously, the Stafford loan was a variable rate, fluctuating with inflation — with this year’s rate at 5.3 percent — but with the changing federal budget and the significant decrease in educational funding, the loan will stay at a fixed rate of 6.8 percent for at least five years, according to De Anda.

According to the College Board, which compiles college loan statistics, the federal loan volume for student borrowing skyrocketed from $20.7 billion to $49.1 billion in the last decade — a 137 percent increase in student debts.

“A general increase in students, a general increase in costs, attendance, an increase in grants [in the state] … should take some of the edge off and reduce [students’ debts] a little bit,” De Anda said. “A lot of [the reductions in student debt] have to do with pretty generous grant programs.”

When asked about suggestions for future students who need financial aid, Seaton recommended that students avoid withdrawing loans at all costs, and instead apply for as many scholarships as possible. Seaton has a few student scholarships assisting his college tuition, but still has to take out a substantial amount of loans.

“It’s unfortunate that once you’re ready to get out to the real world, you’re in such a hole already,” Seaton said. “So many students are being put in that position.”

Fortunately, students’ debts do not seem to be significantly deterring enrollment in graduate education. Despite escalating debts, 21 percent of 1999-00 graduates pursued higher education one year after graduating from a four-year university, compared to 16 percent of their 1992-93 equivalents.

“I’m going to be in debt enough after I graduate,” Seaton said. “It sucks, and it’s going to be a long uphill battle to pay these off … but at the end of it, there is that knowledge that you put yourself through college — that you didn’t rely entirely on your parents. So I guess it feels good in that way.”