WASHINGTON -- U.S. students, who are increasingly turning to borrowing as a way to meet the rising expense of a college education, need to hit the books harder when it comes to estimating the true cost of their student loans, according to a new study released today.

After surveying more than 1,000 students nationwide, the U.S. Public Interest Research Group found a whopping 78 percent were underestimating how much their loans would eventually end up costing them -- on average by almost $5,000.

"Students are forced to take out student loans to pay for college, but most will end up with significant sticker shock when it comes time for repayment," said Ivan Frishberg, director of the consumer group's Higher Education Project.

With a college degree increasingly seen as a prerequisite for success in a fast-paced, high tech economy and the cost of those degrees on the rise, students and their parents have come to depend more and more heavily on education loans.

The amount of money borrowed through government-backed Stafford loans alone more than doubled from $15 billion in 1993 to $35 billion in 2000, according to the College Board.

The survey pegged a lack of understanding of the impact of interest as the main reason students underestimated the true cost of their loans -- with a depressing 18 percent unable to give any estimate at all of what would eventually owe.

Reflecting that, the more students owed, the less likely they were to clearly understand their financial position.

MORE DEBT, LESS CLUE

On average, the students surveyed underestimated the total cost of their loans by $4,846. But those with less than $15,000 in debt did much better, underestimating the cost by just $1,387, while those with over $30,000 in debt did much worse, falling short by a full $7,189.

Compounding the unpleasant surprise awaiting many students, the survey found, was the fact that they also generally overestimated their income after graduation, creating false expectations of how quickly they could pay back their debts.

While the average income for recent college graduates is around $27,000, the students surveyed by U.S. PIRG on average expected to make just over $39,000.

"Students with high levels of debt are already vulnerable to problems repaying their loans after they graduate," Frishberg said. "Now that we know they don't even realize the severity of their situation, we should be doing a lot more to put the lid on rising student debt."

The group urged Congress to make more federal grants, which do not have to be repaid, available to needy students.

It noted that while so-called Pell grants accounted for about 55 percent of aid to students in 1981 compared to 40 percent in loans, the mix currently stood at 60 percent in loans and just 40 percent in grants.

Other steps that could be taken included lowering interest rates on federally-guaranteed student loans, providing a tax credit for student loan interest payments and eliminating origination and insurance fees on the loans, it said.