The debate over the Biden administration’s college loan relief plan has obscured a larger and more important question: Why did college education become so expensive in the first place? It’s a complicated question that has many answers, but it’s a question anyone interested in real college debt reform should be asking.
Biden’s plan to write off between $10,000 and $20,000 per student in federally-backed college loan debt is currently stalled in court — and not faring so well in the court of public opinion. Polls show support for the plan predictably split along partisan lines, but with weak support from independents. Overall, a plurality of Americans support her, but not a majority.
As we noted earlier, even liberals and progressives have reason to have reservations about this plan: its $125,000 income cap is making loops with many people who don’t need ‘assistance. Providing relief to current debt holders is unfair to those who have already paid off their debts or who will acquire them in the future. And it’s inflationary to effectively pump hundreds of billions of federal dollars into the economy.
But the biggest problem with Biden’s plan is that it doesn’t address the underlying causes of soaring tuition fees, which is ultimately the cause of the debt crisis. The net cost of a four-year degree – after applying financial aid and other price reductions – is double what it was 20 years ago. Only hospital care grew at a faster rate.
It’s no wonder that average student loan debt has risen from about $17,000 per graduate in 2000 to nearly $40,000 today. Total debt outstanding now exceeds $1.7 trillion.
Experts point to a range of reasons for spiraling tuition fees: there is the explosion of expensive student amenities (state-of-the-art leisure facilities, etc.) that have become major selling points as universities compete for students. . There are inflated administrative costs, which have risen even as expenses for professors and instructors have fallen. And perhaps most disturbing is the abdication by state governments of their funding responsibilities for higher education, forcing universities to pass on more of the cost to students.
Data from the National Science Foundation shows that government spending per student has held steady or even fallen (after adjusting for inflation) over the past 20 years, even as education has become more expensive. Missouri, for example, spent an average of about $6,200 per student on college funding in 2020, up from nearly $8,000 (adjusted for inflation) in 2000.
The student loan debt crisis is ultimately best understood as a crisis of rising tuition fees — a crisis that could threaten to return society to the days when higher education was solely the preserve of the wealthy. Debt is the symptom. Trying to mitigate it without addressing the root causes of the disease is not the answer.
– St. Louis Post-Dispatch