Credit & Debt
When Did College Costs and Student Debt Spiral Out of Control?
Everyone knows going to college isn't cheap but even keeping pace with inflation, attending college or university costs more in the United States than it ever did. In 1996, the College Board says the average tuition, room and board for a private college was $27,202 a year. That number has soared to $43,921 in 2016. More people are pursuing higher education (a good thing) but many families don't have enough grants or scholarships to cover the costs, leading them to take on more student debt. Between 2005 and 2012 the number of student borrowers jumped 66 percent, from 23.3 million borrowers to 38.8 million borrowers.
1944: Congress passes the G.I. Bill to help World War II soldiers pursue higher education, setting the stage for the contemporary student loan system. By 1947, returning veterans made up 49 percent of incoming college students.
1960: A year at the University of Pennsylvania costs $2,770 including tuition, room, board, and expenses for undergraduates. That's the equivalent of more than $22,000 today — a substantial jump by the standards of the time: Ten years earlier, it cost only $1,284, or about $12,775 in today's dollars.
1965: The Higher Education Act lays out the terms for Guaranteed Student Loans — the predecessor of Stafford Loans — which guaranteed payments in the event of student default.
1972: Congress creates the Basic Educational Opportunity Grant — the forerunner to today's Pell Grants — which increased tuition assistance for middle-class Americans. By 1978, the program covered students from families with household incomes of up to $250,000.
1976: A consortium of universities begins using a standard financial aid form, a precursor to the Free Application for Federal Student Aid, or FAFSA.
1976: The average cost of tuition, room, board, and expenses at a private college reaches $16,213 per year in 2015 dollars. A public college costs on average $7,833 per year.
1976: Students applying for a Pell Grant receive an average of $3,167.
1978: Congress passes the Middle Income Student Assistance Act, which provides grants and loans for middle class students and families.
1983: The Student Loan Consolidation and Technical Amendments Act lets borrowers consolidate student loans from multiple lenders.
1986: The average cost for tuition, room, board, and expenses at a private college becomes $19,708 per year in 2015 dollars. A public college now costs on average $8,543 annually.
1987: Congress renames Guaranteed Student Loans in honor of Robert Stafford, a Vermont politician who supported education during his career in the Senate. By 2006, when he died, the government would give out about 14 million Stafford Loans.
1991: The average cost for tuition, room, board, and expenses at a private college soars to $24,663 annually in 2015 dollars. For a public school, the cost is $9,286 on average for one year of school.
1992: Unsubsidized Stafford Loans, which let students borrow money inexpensively but accumulate interest while the students are in school, are introduced. By 2012, the average amount borrowed by students in combined subsidized and unsubsidized Stafford Loans jumps to $8,230.
1996: Average cost of a private college, including room and board and expenses, reaches $27,202 in 2015 dollars. A year of school at a public university costs $10,552 on average.
1997: The College Board allows families to file FAFSA applications online, beginning the transition to digital applications. In 2013, the number of FAFSA applications tops 17 million.
2001: The average cost of a private college, including room and board and expenses, reaches $30,716 per year in 2015 dollars. A year of school at a public university costs $11,655 on average.
2004: Sallie Mae, originally a government-backed organization, becomes a private corporation. The company issues $13.7 billion in student loans.
2005: The average student loan balance reaches $15,864.
2006: The average cost of a private college, including room and board and expenses, reaches $35,106 in 2015 dollars. For public school, the average price is $14,797.
2006: Starting in July 2006, all Stafford Loans are issued with a fixed interest rate. (Previously, interest rates varied depending on whether a borrower was still in school or had already started making payments.) That year, Stafford Loans had an interest rate of 6.8 percent.
2007: The College Cost Reduction and Access Act gives borrowers more ways to repay loans and access federal education funding, leading to the largest increase in federal student aid since the G.I. Bill.
2008: The global financial crisis leads to government budget cuts, and funding for Federal Direct Loans shrinks from $7 billion to $509 million.
2010: The Health Care and Education Reconciliation Act increases the maximum Pell Grant and gives the Education Department authority to administer loans, leading to an estimated $19 billion reduction in the federal deficit.
2011: The Budget Control Act phases out subsidized Stafford Loans for graduate students, who can now borrow up to $20,500 a year in unsubsidized Stafford Loans but who don't get help paying interest while they're in school.
2011: The average cost of a private college, including room and board and expenses, reaches $39,918. Public university costs an average of $17,710 annually.
2012: The average student loan balance reaches almost $25,000, almost $10,000 more than it was a decade previous.
2015: Average cost of a private college, including room and board and expenses, reaches $43,921. A year of school at a public college now costs an average of $19,548.
By planning ahead of time and evaluating different scholarships, part-time jobs, and other sources of funding, families can help mitigate the cost of college—and in today's economy, a college degree is an invaluable tool in the workplace. Additionally, don't discount the fact that employees with bachelor's degrees typically make more than their peers who only have a high-school diploma.
Learn more about student debt and what the government is doing about it.
Robert Brian Levine is a writer and editor in New York who covers business and culture.