July 17, 2013
A Mystery Behind the Rise of Student Debt

The wild growth of student debt seems like an illness with an obvious cause. Both enrollment and tuition prices went on a tear over the past two decades. Add the two together, and you get today’s trillion-dollar problem. Right?Well, not quite. In a recent report, the Hamilton Project’s Michael Greenstone and Adam Looney argue that the student-loan boom is, in fact, a bit more more mysterious than journalists and student advocates tend to acknowledge. It’s not that tuition hikes and growing class rolls aren’t playing a part — they certainly are. But there’s something else going on, too. In time, it seems, the average student has started paying less out of pocket towards her own education, as shown in the green area in the graph below (the purple area shows grant aid and the blue shows loans). 
Read more.

A Mystery Behind the Rise of Student Debt

The wild growth of student debt seems like an illness with an obvious cause. Both enrollment and tuition prices went on a tear over the past two decades. Add the two together, and you get today’s trillion-dollar problem. Right?

Well, not quite. In a recent report, the Hamilton Project’s Michael Greenstone and Adam Looney argue that the student-loan boom is, in fact, a bit more more mysterious than journalists and student advocates tend to acknowledge. It’s not that tuition hikes and growing class rolls aren’t playing a part — they certainly are. But there’s something else going on, too. In time, it seems, the average student has started paying less out of pocket towards her own education, as shown in the green area in the graph below (the purple area shows grant aid and the blue shows loans).

Read more.

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    Student loans.
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    This is because tuition has increased faster than wages. Families have less to invest.
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