Many students are forced to take out loans to finance college, but more and more are making the wrong decision by choosing private over federal loans.

According to a report released Tuesday by the Project on Student Debt, almost two-thirds of students who took out private loans in 2007-08 did not borrow the maximum amount in federal Stafford loans.

Debt is a serious issue for many graduates, yet today’s students aren’t taking full advantage of the cheapest loans available. If they fully utilize federal loans, they may not need costly private loans, which the report refers to as “one of the riskiest ways to finance a college education.”

Private loans often have higher interest rates and offer students less protection than federal loans.

The report analyzed data from the U.S. Education Department’s National Postsecondary Student Aid Study and found that despite their disadvantages, the percentage of undergraduates with private loans had risen from 5 percent in 2003-04 to 14 percent in 2007-08.

The amount of money borrowed doubled from $7.2 billion in 2003-04 to $15 billion

in 2007-08.

Most surprisingly, 26 percent of students with private loans didn’t take out any Stafford loans at all, even though nearly half of them took the time to fill out the FAFSA.

There is no good reason why undergraduates should pass over federal loans. Even experts are baffled as to why more students are taking the expensive route.

Lauren J. Asher, president of the Institute for College Access and Success, which runs the Project on Student Debt, told to the Chronicle of Higher Education no one knows what caused the increase. Asher said she thinks aggressive ad campaigns launched by the companies that offer private loans may have contributed.

A report released in 2007 by the American Council on Education included speculation on why some students prefer private loans. One possible explanation is that students like the flashy marketing schemes and the easy application process for private loans.

It is true that applying for federal aid is a lot more work, but students who take the easy way out will suffer in the long run, as they struggle to pay off their larger debts. It’s easy to be taken in by a company’s pitch, but students should not act on impulse, and it is no secret that a Stafford loan is often the better choice.

If more students had taken the time to do research and fully utilize their federal options, private loans might not have seen such growth. In this economic environment, the last thing students need is more debt.

The column was originally published on Aug. 26 by the University of South Florida’s

The Oracle editorial board. Content was made available by Uwire.com