According to Libby Nelson in the Politico, the Department of Education has just released a quadrennial report (“2011–12 National Postsecondary Student Aid Study (NPSAS:12): Student Financial Aid Estimates for 2011–12”) analyzing the manner in which students are paying for college. Based on data from 2011-12 that uses a sample of more than 100,000 students (mostly undergrads), the report indicates that for the first time a majority – 57% — of undergraduates are receiving federal financial aid of some kind. Also, a higher proportion than ever are taking out loans. Secretary of Education Arne Duncan stated that “[i]n total, the number of Pell Grant recipients has increased more than 50 percent since 2008….” Pell grant spending has increased from $12.8 billion in 2007 to $35.6 billion in 2011.
So, just as national awareness of the harms of college debt have become more and more clear, students are becoming more indebted. According to Nelson, “About 41 percent of all undergraduates took out loans, up from 35 percent four years ago.” This is tragic.
President Obama is set to take a bus tour later this week to discuss holding down college costs. Unfortunately, it doesn’t seem like anyone in Washington is discussing the promotion of alternate types of education (e.g., online) and alternate degree credentialing systems that could actually lower the cost of higher education. Lowering college costs will require unleashing market forces for a product that remains resistant to competitive forces. That has to change.