Causes Of Student Debt

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The term student debt has become a bit controversial in today's world; it strikes fear into the hearts of students and parents alike. This is because student debt is increasing at an incredible rate and everyone agrees that it is a major problem. Many solutions have been proposed to fix this problem, yet nothing has been done. This problem is projected to worsen in the near future. The causes of this are relatively simple and clear-cut. The increase in student debt is caused by a combination of factors including rising tuition, decreases in government funding, the shift to student loans, and increases in the overall costs of college. Unsurprisingly, the cost of college tuition has skyrocketed in recent years, contributing to rising student…show more content…
Government funding once covered the majority of public college funding, but this has decreased significantly. Colleges then passed this burden on to students, thus increasing student debt. This funding issue is not a new problem:“ A long and steepening decline in state financial support of public colleges is responsible for most of the tuition increase”(Farish, 1). The amount of funding for colleges has been constantly decreasing. The longer this goes on the worse it will be for students in terms of tuition costs. The government has failed to increase aid even as costs increase dramatically. For instance the amount students receive from a Pell Grant today is the same as it was in the 70s adjusted for inflation (Long, 3). Meanwhile the costs of tuition has more than doubled. Another major problem is that students are having to use loans to pay for increased costs. Over time, students have been forced to take out more student loans: “ Loans made up 58 percent of all student aid [in 2001], compared with 41 percent in 1980, when the Pell Grant was at the height of its buying power”(“Tuitions Rise Sharply”, 2). With the loss of grants and the increase of student loans, student debt began to increase rapidly. Students now have to pay for an increasing percentage of their education. As private student loans became available, debt increased even more: “The intersection of student need and increased availability of bank loans--even if with higher
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