[Edward64]

Why has tuition costs risen so much? I do believe this is a major factor.

Democrats will avoid the real causes of the student loan crisis at Wednesday’s debate - MarketWatch

Back in 1987, when federally backed loans were far scarcer, then-Secretary of Education Bill Bennett offered the Bennett Hypothesis. “Increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase.” Thirty-two years later, it has really become Bennett’s Law of Tuition Stimulation.

A 2015 report by the Federal Reserve Bank of New York demonstrated this, noting a direct correlation between the rise in student loan borrowing and increasing tuition.

“Higher tuition costs raise loan demand, but loan supply … [relaxes] students’ funding constraints,” the bank said, asserting that there is a “pass-through effect on tuition.” This means that for every dollar a college or university gets in subsidized federal loans, tuition increases 65 cents. The outcome is similar for unsubsidized loans (30 cents) and Pell Grants (55 cents).

In short, student debt isn’t skyrocketing because college is too expensive. Higher education is too expensive because federal student loans and grants are so plentiful.