A Radical Solution For America’s Worsening College Tuition Bubble
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Over the last three decades, through good economic times and bad, one of the few constants in American life has been the relentless rise in the price of higher education. The numbers are stark: According to the non-profit College Board, public four-year universities raised tuition and fees by 8.3 percent this year, more than double the rate of inflation. This was typical: Over the last decade, public university tuition grew by an average of 5.6 percent above inflation every year. And the problem is also getting worse: In the 1990s, the annual real increase was 3.2 percent. In the 1980s, it was 4.5 percent.
Even as the economy has reorganized itself to make college degrees increasingly indispensable for the pursuit of a decent career, federal financial aid programs and family income haven’t been able to keep up with incredibly buoyant tuition bills. Students and families have been left with only one recourse: borrowing. The federal government is now lending college students over $100 billion per year, a 56 percent per-student increase, after adjusting for inflation, from just ten years ago. Most undergraduates borrow today, and leave college with an average of over $25,000 in debt. And as the many signs displayed by the Occupy movement attest, some young people owe much more than that. For a growing number of students, entering the lucrative college-educated realms of the economy is like being smuggled across the border—you can get to the promised land if you try hard enough, but you arrive in a state of indentured servitude to the shady operators who overcharged you for the trip.
Politicians are taking note of the rise in public outrage. Several weeks ago, at a student financial aid conference in (appropriately enough) Las Vegas, U.S. Secretary of Education Arne Duncan exhorted the nation’s colleges and universities to work with more urgency and creativity to “contain the spiraling costs of college and reduce the burden of student debt.” The next week, President Obama held a private meeting with a small group of college presidents to discuss the issue. Vice President Biden followed a few days later, telling a group of parents that “The incredible cost of college education is for the first time crushing hundreds of parents.” (He meant hundreds of thousands, presumably.)
