GST has helped push up the cost of school, but it’s also played a role in a shift toward higher education that could reduce some of the burden on middle-class families.
The nation has a $1 trillion backlog of school-related debts, according to the College Board, and it’s projected to grow to $3 trillion by 2027.
That could add another $1.5 trillion to the $4.2 trillion deficit over the next decade.
And the costs of higher education are rising rapidly, thanks in part to the rise of the private sector, which has become the backbone of higher ed.
According to the Education Finance Research Institute, a think tank, the sector has seen a 4.4 percent jump in enrollment and a 15.4 million increase in students in the last five years, a nearly 1,000 percent increase in student debt since 2008.
“A lot of these institutions are seeing a lot of revenue from a lot more students,” said Steve Zadrozny, the director of education at the Center for American Progress.
“That revenue comes from the students who are graduating and going to school and going out into the world and paying tuition.
The problem is that these are students that are going to go on to higher education, and they’re paying the full cost of their education.”
The growing burden of college costs could make it harder for parents to afford to send their kids to college, or for students to earn a college degree.
A new report from the National Association of College and University Business Officers, released Wednesday, notes that college costs have risen more than 40 percent since 2008, but the cost burden has fallen most dramatically for low-income families.
It found that while families with children under age 18 accounted for about 15 percent of all student loan debt, they have been the largest group of borrowers.
“If you have a family with children, and you’re not able to save, you’re going to have a lot less money to invest,” said Scott Pyle, president and CEO of the National Council for Community and Economic Research.
“In the last 10 years, we’ve seen a tremendous shift in the costs and the debt that we’re paying, and that’s not just for lower-income students, it’s for lower income families.”
For middle- and low-wage families, college costs are also likely to increase.
A growing number of students are choosing not to attend college, citing a number of reasons.
For some, the costs have been more expensive than anticipated.
For example, the cost per student has risen more for incoming freshman than previous years, with the average price of a degree at public universities now averaging $24,000.
In many cases, students are delaying college to save money, while others are taking on more debt to cover the cost.
“There’s a significant shift in financial circumstances, which is a concern for students,” Zadrosny said.
In some cases, the financial aid they receive for attending college is more limited than anticipated and the impact on the debt they have to pay back can be significant.
For instance, some states have cut financial aid to families with incomes up to and including $150,000, and some students are struggling to pay for college because they cannot pay back the debt.
“I think it’s a lot worse for students than it is for families,” said Pyle.
“They’re not getting the assistance they need.”
In some states, the impact of the rising cost of higher-education has been especially pronounced for low and moderate-income parents.
A recent report by the Center on Budget and Policy Priorities found that for families earning less than $45,000 per year, the average debt is $29,000 and the average monthly payments on student loans are about $2,300.
In addition, some parents are taking out loans to pay off their student loans because they can’t afford the payments.
For parents of color, college has become a significant financial burden.
While about a quarter of black families have student loan debts, nearly one in three of them is paying more than $20,000 in total debt, and a significant portion of that debt is on the balance sheet of a financial institution.
“We’re going through a period of consolidation of the student loan market,” said Zadronny.
“And we’re seeing that consolidation accelerate.
It’s a very troubling situation for a lot that is black, Latino, poor, or working class.”
Many students, especially those in families with lower income, are forced to pay more than their fair share.
As a result, many families have been hit hard by the increase in the cost to educate their children.
In the last three years, the median family income in the U.S. has increased by more than 9 percent, according the US.
According the Census, the share of people in poverty has more than doubled, with blacks more than doubling their income from 15.6 percent to