In recent years, student loan debt has grown significantly in the United States. College costs have now even surpassed the inflation and wage growth rates. Many students now are forced to take out student loans with rising tuition costs coupled with limited amounts of financial aid.
Over the last 58 years, the cost of college tuition in the United States has tripled for undergraduate students. It has increased “from $4,336 in 1963 to $13,777 in 2020”. Even in the past two decades, the average college tuition and fees have risen by 78% at most four-year universities (Bryant, 2023). The price of college has affected many when deciding if or where they should attend college. One recent graduate, Ryan Zhu, talks about his experience when he was deciding where to go to college, “After being admitted to UC Berkeley, the appeal of attending was gone after receiving the full price of attendance. The price of tuition and other requirements became too much as there is no financial aid help for out-of-state residents.”
The rise in college tuition has subsequently affected the amount of student loans taken by students. Over the last two decades, student loans have doubled. “About forty-eight million U.S borrowers collectively owed more than $1.6 trillion in federal student loans. Additional private loans bring that total to above 1.7 trillion.” (CFR, 2022). This growth has only continued, but why? Lynne Baker, Managing Director of Communications of the Illinois Student Assistance Commission said, “Another factor that contributed to more student loan debt over the last 30 years is more students going to college. The data is clear that those with a college degree experience less unemployment and higher earnings than those with only a high school education. But even a certificate or two-year degree can increase earning power and reduce the risk of unemployment.”
Experts and policymakers understand that the problem of rising college costs and the amount of loans have to be addressed. President Biden proposed a plan to forgive $20,000 for those who were granted a Pell Grant. Biden also would have covered $10,000 for borrowers who earn less than $125,000. This plan was struck down by the Supreme Court. Despite the ruling, Biden and his administration have recently forgiven 39 billion dollars worth of student loans for over 800,000 borrowers.