NCPA - National Center for Policy Analysis


July 7, 2010

College tuition has been increasing at such an alarming rate that some say we're witnessing yet another bubble in America.  There are many reasons to believe we're in the middle of a college tuition bubble, says Naked Law. 

Tuition is, and has been, increasing at double or triple the rate of inflation: 

  • On average, college tuition increases at around 8 percent per year, which means the cost of college doubles every nine years.
  • Because colleges know that students will simply borrow more money to cover tuition increases, colleges have been relying on steady tuition hikes to solve all of their money problems.  

Students are borrowing more than ever to pay for college: 

  • The number of college students graduating with over $25,000 in student loan debt has tripled in the past decade alone.
  • Today, 66 percent of students borrow to pay for college, taking on an average of $23,165 in debt.  

For-profit colleges are paying homeless people to take out federal loans to enroll: 

  • Because student loans are so easy to acquire, enterprising colleges are paying homeless people to enroll.
  • Paying someone a $2,000 "stipend" gets the college $20,000 per year in tuition courtesy of the federal government. 

College president salaries are sky high, even in a historical economic downturn: 

  • USA Today reported that 23 private college presidents made more than $1 million in 2008, while 110 made more than $500,000.
  • This is not the norm -- as recently as 2002, there were no million-dollar presidents. 

Source: Report, "Eight Reasons College Tuition Is the Next Bubble to Burst," Naked Law, June 8, 2010.


Browse more articles on Education Issues