Why is college debt so high?
Last updated 7/13/2021 at 8:38pm
A friend of mine, let's call her Mary, began college at the University of Washington in 1967 and graduated with an undergraduate degree in 1971. According to the university's records, she paid $3,160 (in 2020 dollars) for her final year of in-state tuition.
Mary's granddaughter, Emma, graduated after four years from the University of Washington in 2020 and paid $10,630 for her final year of in-state tuition. Essentially, school administrators more than tripled tuition at the state's premier public university during that 50-year period.
The cost of living also increased in the last 50 years. According to the university's estimate, Mary spent $11,500 (in 2020 dollars) for room, meals, books, and personal expenses. In contrast, Emma spent $19,000 for the same items, or almost twice as much. In other words, tuition increased at a much greater rate than the cost of living.
College administrators give several reasons for these rising tuition charges - schools have expanded their curriculums and they are enrolling more students. Yet each additional student pays tuition, so as more people sign up for college, the overhead costs per student should be covered.
In 2020, 43 million current and former college students nationally owed a total of $1.6 trillion in student loans. The Biden administration is now considering an executive order to cancel the vast majority of these outstanding loans to the consternation of those students who worked hard and paid their own tuition, or those who borrowed and have responsibly paid back their loans.
For the past 50 years, the actual cost of educating a student at Washington's colleges has remained essentially unchanged in inflation-adjusted dollars. Yet the percentage of tuition paid by students and their families has increased dramatically. Mary and her granddaughter paid for in-state tuition at a public university. The costs for post-graduate education and for private school tuition are much higher.
With ever-increasing tuition costs, it is easy to understand why students would need to go thousands of dollars in debt for their education. The questions raised, though, are why the state continues to pay a smaller percentage of their education costs and why the government should forgive the students' debt.
The Washington state budget increased by nearly 400% during the last 50 years, while the state population only doubled over the same period. The priorities of the state budget writers also changed dramatically over those five decades. For example, in 1970 funding for Medicaid, was an extremely small part of the budget. By 2020, Medicaid spending consumed approximately one-third of the state budget, crowding out taxpayer money for such programs as higher education.
Some argue that loan forgiveness would actually save money and potentially create more jobs. This is ridiculous thinking and is simply an excuse for more government intervention into the economy. It also dodges two key questions about rising tuition costs: Why aren't administrators taking steps to make college more affordable and why have government officials prioritized entitlement spending over education?
Government officials created this financial burden on college students by setting the wrong spending priorities and forcing tuitions to go up. Forgiving student debt simply compounds that problem, does nothing to reduce the cost of going to college, and punishes taxpayers for the government's mistakes.
– Roger Stark is a Senior Fellow for the Center for Health Care at Washington Policy Center and a retired physician. He can be reached at [email protected]