1. Student debt is higher because there are 3 million more students now vs 2008; education is also more expensive in part due to rapid technological changes (which drives up cost of textbooks, lab equipment, teaching talent) and will keep getting more expensive in certain cities.
2. Besides higher demand for college, financial aid programs may also be contributing to the rising cost of college since 1978 (when Congress passed Middle Income Student Assistance Act).
”For every new dollar of federal student aid, tuition is raised by 65 cents.”
3. Keep an eye on the student loan delinquency line in the graph below - politicians promising student debt relief could actually cause some students to further delay paying off their loan debt in anticipation of such relief, and that could snowball into a financial crisis…
4. To support demand for STEM degrees many colleges have invested in expensive tech ( https://www.educationdive.com/news/colleges-and-universities-invest-in-tech-to-support-new-stem-degrees/441316/ …). Campuses are now much more high tech (high speed Internet, more computers, in-class technology) vs just 10 years ago - this has also helped drive up the cost of college.
5. Colleges, universities are splurging on new architecture and construction to attract STEM student and faculty talent (and partly to meet newer “green” environmental regulations).
“Innovation campuses” modeled on Silicon Valley tech campuses (Google, Facebook) have popped up.
6. Spike in student loan delinquencies (despite low unemployment) is ominous - coincides with Q1 2018 when politicians ramped up talk of student debt relief ahead of midterms. Politicians have to be careful…if they can’t deliver, it’s the debtors and the taxpayers who will pay.
7. When subprime mortgage borrowing nearly tripled in 2004, 2005, lawmakers dangled offering borrowers debt relief and many debtors stopped/delayed paying off loans, which became the catalyst for the financial crisis - could dangling student debt relief trigger another crisis?
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