Source: The New York Times
If historical patterns repeat, public college and university budgets will be slashed, sending tuition and student loan debt skyward. Some institutions will be so starved of funding that they will effectively cease to be “public” at all. Others will have a greatly diminished ability to help students learn. Nationwide, the effect of the last recession on university finances was partly offset by tuition increases financed by federally guaranteed student loans. But that just shifted the problem from one place to another. When Lehman Brothers collapsed in September 2008, Americans owed about $660 billion in outstanding student loan debt. That amount is over $1.6 trillion today. Alarm about the student debt problem grew in volume over the last decade as debt totals climbed. In the future, colleges and universities can’t rely on students and parents borrowing another trillion dollars to make ends meet. Many are already taking out the maximum allowable amount of federal loans.