Americans owe a record $1.5 trillion in student loans, which is currently the fastest growing kind of debt in the nation.
So how did it get this bad? Part of the problem lies in how many people are going to college, and how long they’re taking to graduate. Just over half the students who enroll in college will finish it, and less than one-fifth will finish their bachelor’s degree within four years. Those figures are from the National Center for Education Statistics. More time in college per student means more money spent per student and thusly, more debt per student.
Another problem is the college “arms race”. Increasingly, colleges have taken to offering expensive amenities to win over affluent students, that drive up the cost of tuition overall. Lazy rivers, expensive gym memberships, fancy dining centers, and water parks. Not all colleges go to such an extreme extent with their amenities, but it is increasingly common.
So more people are going to college and more colleges are investing in amenities, which drives up the costs. Moreover, college attendance is subsidized, which further increases demand.
All of these facts are readily available, but none of them explain the problem completely? What’s the missing piece to the puzzle?
Briefly, the likely answer is that public funding for universities and higher education more generally has stagnated, and even declined. This process began in the 1980s, leaving universities strapped for cash just as they found themselves having to take care of the most students.
Those cuts didn’t happen in isolation; they were part of a broader decline in funding for public institutions more generally, which characterized the 1980s and ‘90s to a greater or lesser degree.