Outlook on Student Debt

Aaron Briggs

  The United States have managed to reach another shocking economic milestone this year. The total amount of student debt has surpassed the total amount of credit card debt for Americans. Credit card debt dropped from $975 billion to $826 billion, meanwhile student debt has risen steadily to $829 billion.
This statistic is shocking because much of the reduction in credit card debt is due to a rise bankruptcies, an option not available for holders of student debt. Student debt is one of the few types of debt that can't be wiped clean during a bankruptcy, which means it must be paid back regardless of your situation.
 This is especially alarming when you consider how rapidly tuition has been rising around the nation. Montana Tech has done an excellent job of controlling costs and have managed to keep costs low relative to schools around the rest of the country.

  This quote from The Goldwater Institute's report "Administrative Bloat at American Universities: The Real Reason for High Costs in Higher Education", shows where most of the cost increases are coming from.

“Enrollment at America’s leading universities has been increasing dramatically, rising nearly 15 percent between 1993 and 2007. Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent.”

  Many pundits have been wondering if we are in the midst of a “student debt bubble” much like the housing bubble that burst in 2008. Some say that the constant increases in administrative costs are not sustainable, and that many schools will eventually be asking the federal government for a bailout.
  This is an issue that student should be aware of, considering most of us need school loans to cover living expenses or tuition. The best way to avoid the issue is to avoid student debt, but that is not a possibility for most students. One would hope that schools will find some way to control costs, but if the last 30 years are any indication we could be looking at million dollar degrees soon.