It used to be that final exams gave college students sleepless nights. Any university graduate can, I'm sure, regale you with tales of Starbuck's-fueled cram sessions in anticipation of some physics or history final. And she would also confess to great relief that after eight (or perhaps more) such go-'rounds, she is glad to have that stress out of her life.

But now it seems the university final-exam period looms far less forbodingly in students' minds than another, more dreadful day -- the end of the student loan repayment grace period. Farnoosh Torabi, in a December 9, 2010 post at Creditbloggers, house blog of Credit.com, observes that "[c]onsumers may be using fewer credit cards to finance their lives, but student loan debt continues to rise, according to a new report from The Federal Reserve." Indeed, student loans have, along with auto loans, another prevalent kind of nonrevolving consumer debt, risen "by more than $9 billion," Torabi reports.

The Fed report Torabi cites attributes this remarkable increase in the amount of student loan debt to three related factors:

• An increasingly competitive job market has made additional education and training absolutely essential.
• Recent years have seen an influx of returning students, who, responding to this market pressure, seek to burnish their résumés with additional skills, qualifications, and training.
• A sluggish economy has forced many new and returning students to seek loans to finance their further education.

Overwhelmingly, it is the government that is extending these loans to students. With the expansion of credit, however, comes the danger of many of those loans going bad as borrowers default on their payments. Torabi presents three sobering bits of information to suggest that a massive student-debt default storm may be gathering on the horizon:

• Student loan debt has well surpassed credit card debt as the most prevalent form of consumer debt in the United States.
• Student loan debt defaults are on the rise, with the official figure now standing at some seven percent of existing loan -- a figure that many industry experts consider unrealistically low.
• Looming grace-period expirations for ever more college grads will only add to the existing amount of outstanding debt, and thus to the amount of possible defaulters.

These factors means the student loan program appears ripe for a crisis nearly identical to the one experienced in 2008, which involved home mortgage debt defaults of truly catastrophic numbers.

A clear-thinking few among higher-education institutions have dedicated themselves to finding ways to head off a similar collapse in student debt. One way is to make student loans less necessary by making student grants and scholarships more widely available. Traditionally reserved for high-achieving high-schoolers or already matriculating college students, tuition monies are now earmarked for so-called nontraditional students (learners who enter or return to university study and are older than 22 years of age), an underserved segment of the education-seeking population.

Taking the lead in finding a remedy for this relative neglect, Western Governors University has announced in a December 7, 2010 press release the continuation of its rousingly successful Economic Turnaround Scholarship program. "In May 2009, non-profit, online Western Governors University, www.wgu.edu, launched a competitive scholarship program aimed at helping laid-off workers return to college to complete bachelor's or post-baccalaureate degrees," the release reads. "Nearly 150 students have been awarded $750,000 in scholarships as part of the Economic Turnaround Scholarship Program, and today, the online university announced that it is extending the program into 2011. The need-based program provides up to $1,250 per six-month term for up to four terms to new WGU students who have lost their jobs in the past 18 months."

It's encouraging to see such initiative being taken by an online institution like Western Governors University, and it would be even more encouraging if its peer institutions were to follow suit. Debt-saddled degree holders do not an economic recovery make, and an economy that can't recover is something that we should all fear.