The student-loan system is broken, and it’s time to place the blame squarely where it belongs, i.e., on colleges and universities.
Since the early '80s, annual percentage increases in tuition, fees, room and board have exceeded inflation, and compounding has taken its toll: net price of attendance has skyrocketed, making higher education impossible without massive loans. The obvious conclusion is that campus spending is out of control. Is it time to return to the days when campus was a library, a cafeteria, some classrooms and dorms, and a lean faculty and staff?
Well, maybe that’s too drastic. The fact remains, however, that high student debt begins and ends with high prices, and high operating costs are the cause.
Unfortunately, attacking the cause won’t be easy. As non-profits, colleges and universities have little incentive to control costs; their incentive is to take in whatever they can, and spend whatever they take in, on mission. Given this, revamped budgets, based on revamped missions, are the clear starting point for reform.
It won’t be easy: the two offer only a place to start, not a way to proceed. But it’s essential to act because, unless operating costs come down, student debt won’t either.