Pop quiz: why does college tuition get more and more expensive each year?
Answer: because it can.
Jacob Goldstein of NPR explains the why the “sticker price,”
that is the full price colleges list in their brochures, keep
on increasing while the “net price” has stayed relatively
constant (the difference is attributable to scholarships and grants):
But what happens if you don’t qualify for those scholarships and grants?
You have to borrow, which explains the crazy growth of student loans that
mirror the growth in college tuition.
Daniel Indiviglio of The Atlantic noted
that student loans have grown 511% since 1999 – that’s 6 times the
rate of the housing bubble.
Of course the big question is: will the student loan bubble pop just
like the housing bubble? Though there are parallels between the student
loan and housing, Andrew Hacker and Claudia Dreifus of The Atlantic noted
one big difference:
With mortgage defaults, banks seize and resell the home. But if
a degree can’t be sold, that doesn’t deter the banks. They essentially
wrote the student loan law, in which the fine-print says they aren’t
“dischargable.” So even if you file for bankruptcy, the payments
continue due. Hence these stern word from Barmak Nassirian of the American
Association of College Registrars and Admissions Officers. “You
will be hounded for life,” he warns. “They will garnish your
wages. They will intercept your tax refunds. You become ineligible for
federal employment.” He adds that any professional license can
be revoked and Social Security checks docked when you retire. We can’t
think of any other statute with such sadistic provisions.
See more here:
Why College Tuition Gets More Expensive Year After Year