Student loans and the debt that goes with them are not only still in the news, but student loans have become big business for the federal government. In fact, federal student loans have almost doubled since 2007, with the result that the US Department of Education made a profit of more than $42.5 billion in the last fiscal year. Furthermore, had Obama and Congress not temporarily lowered student loan interest rates this summer, that figure would have been about $8 billion higher, thus up from the whopping $47.9 billion in 2011.
The other result: Student loan debt now stands at about $1.2 trillion. “That,” says Federal Reserve Chairman Ben Bernanke, “is a burden that is affecting, for example, the ability of young people to buy their first home, affecting other purchase decisions they might make, obviously affecting their status.” overall financial.
Meanwhile, the Bellevue University study, “The Search for Affordable Alternatives: Rising Costs and Massive Student Loan Debt Put College Out of Reach for Many,” found that:
- 68% of Americans believe that degree programs currently cost more than they are worth.
- 36% said the costs of a title have increased disproportionately to its value in the last 5 years.
- 76% said affordability would be important to them if they wanted to get a degree.
- 37% said affordability would likely motivate them to get a degree in the next five years.
- Only 40% said getting more education is worth taking on more debt.
- 55% said they would only get a title if it didn’t put them in debt.
Of such results, Bellevue President Dr. Mary Hawkins says, “Students of all ages understand the value of earning a degree, but many students cannot afford to pay more than is necessary to earn these degrees. If colleges and universities make their programs more affordable, it will give more adults the opportunity to learn the skills needed to fill the high-tech jobs in the high schools of the future.”
So how much is college these days? According to the College Board’s “Trends in College Pricing,” on average:
- At public universities, in-state tuition and fees increased 2.9% to $8,893.
- At public universities, out-of-state tuition and fees increased 3/1% to $22,203.
- At private universities, tuition and fees increased 3.8% to $30,094.
Then you have to pay for room and board, as well as books and school supplies. The latter alone are estimated to add up to about $1,200 at public universities and $1,244 at private schools.
In other words, we’re talking big bucks here, and the costs keep rising. However, college and debt don’t necessarily have to go hand in hand. Elections matter and bargains are available, especially when it comes to in-state tuition. Being public, not private, also makes a lot of sense.
Take a look, for example, at these three Pennsylvania universities and their 2013-14 tuition costs:
- Bloomsburg University: $6,622 (in-state); $16,556 (out of state)
- Penn State University: $16,992 (in-state); $29,556 (out of state)
- University of Pennsylvania: $40,594
You get the picture.