The Student Debt Crisis in America

It’s no secret that college costs have been rising steadily for years. College education costs have increased by more than 500% since 1985. For many young Americans, this trend has led to tens of thousands of dollars of student debt and, in some cases, a minimum wage job after graduation. So, what’s behind this trend? And are college grads any better off after they finish their degree? Let’s take a closer look.

*Note: Data is for private four-year colleges only. Source: CollegeBoard.org

The Rising Cost of College Tuition
There are a number of reasons why the cost of college has been rising so rapidly. One major reason is that state funding for public colleges and universities has been declining steadily for years. In fact, per-student funding at public colleges is nearly 20% lower than it was just 10 years ago. This decrease in state funding has led public colleges to raise tuition prices in order to make up the difference.

Another reason for the rising cost of college is the increasing number of non-teaching staff members at colleges and universities. These administrative positions have seen significant growth in recent years, which has led to an increase in overall expenses for these institutions. In fact, from 2001 to 2011, the number of non-teaching staff members at private colleges increased by more than 60%*

*Note: Data is for four-year public colleges and universities only. Source: National Center for Education Statistics
*Data is for private four-year colleges and universities only. Source: National Center for Education Statistics The Impact of Student Debt on Young Americans

All this talk about the rising cost of college may have you wondering how young Americans are able to afford it. Unfortunately, many students have no choice but to finance their education with student loans. In fact, nearly 70% Of American college graduates leave school with some form of student debt. For many grads, this debt can be crippling, leading them to delay major life milestones like buying a home or starting a family.

Not only does student debt have a major impact on graduates’ lives, but it also affects the economy as a whole. When young Americans are saddled with tens of thousands of dollars in debt, they are less likely to spend money on things like homes, cars, and other big-ticket items. This lack of spending can lead to slower economic growth and fewer job opportunities for everyone—not just recent grads.
*Source: Forbes

With college costs increasing rapidly and student debt becoming more common, many young Americans are beginning to wonder if a college degree is really worth it. While there is no easy answer to this question, there is no doubt that the current state of affairs is not sustainable. Something needs to change—whether that means more government investment in higher education or colleges finding new ways to operate more efficiently—in order for America’s future generations to be able to afford a quality education.