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According to the Consumer Financial Protection Bureau: Total outstanding student loan debt surpassed $1 trillion late last year.

Many folks blame rising tuition costs as the chief driving factor of massive student loan debt. According to the U.S. Department of Education, the inflation adjusted annual cost of undergraduate tuition, room, and board in 1980 was $7,685 and in 2010 it was $17,464. On average, tuition tends to increase about 8% per year - that means that the cost of college doubles every nine years.

But why are colleges and universities charging more for tuition?

Much of the credit belongs to the Department of Education, Federal grants, and government loans for college and university students. The government has taken on the role of subsidizing tuition costs, and as a result, universities are relieved from the market pressure of providing the best quality education at the lowest possible price. By the government trying to make college more affordable for everyone, they have actually driven prices through the roof while diminishing the quality of the product. They have also created incentives for students to take an obscene amount of government loans to finance their education in degrees that will do little to advance their careers or enrich their lives.

I am not saying college is not valuable. It certainly can be. But for those that go to college simply because it is what the rest of the herd is doing may be fleecing themselves without knowing it.

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Listen to Jason's 9min podcast on education and the student loan bubble:

Mary Ganssle
4/3/2012 08:30:32 am

I laughed when I read your last sentence! Very clever. And I enjoyed your podcast. Very interesting (and sobering) statistics. I paid my school loans off decades ago, but feel sorry for the kids who have school loans today (and for myself if I end up paying for the defaulted loans).
Keep up the good work, Jason.

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Jason
4/3/2012 10:38:55 pm

Thanks Mary! I appreciate the feedback.

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11/2/2017 10:55:32 am

I want to know more about the service you are talking about. Let`s hope for the best!

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