Back in the 1980s, there was a $2,500 limit on the amount of federal student loans you could take out in a year. The limit on federal loans for students is much higher now. I personally was able to borrow over $20,000 for one year.
Some high-tuition colleges average over $55,000 per student in debt. With the dramatic rise of inflation, and median incomes falling, student loan debt is an important talking point. Many recent grads have trouble making their loan payments. A whole generation of middle-class students is being crushed by student debt.
How did this happen? Why did this happen? Two well-intentioned goals of our federal government. There is a reasonable belief that a quality college education should be within the reach of every American. There is also an expectation that if students borrow money from the federal government, they should repay it.
As a result of this, the government has inflated the cost of an education dramatically; over the last 30 years, inflation-adjusted federal financial aid has quadrupled.
The more money the federal government moves to be used for financial aid, the more money the colleges charge for tuition. Inflation-adjusted tuition and fees have tripled, while aid quadrupled; the aid is going up faster than the tuition.
According to Neal McCluskey’s research at the Cato Institute, this has nothing to do with costs. McCluskey found it costs roughly $8,000 a year to educate an undergraduate at an average residential college. Yet the average college bill—including room and board—charged at a private four-year university is $37,000, and $16,000 at a public one.
This blog is comprised of information from multiple studies, the Associated Press, and CBS News.
