The amount of debt that students have accumulated in pursuit of higher education is staggering. According to the latest data from the Federal Reserve, 46 million Americans owe $1.75 trillion in student loans. A report by the Institute for College Access and Success indicates that the average student loan for graduating seniors in the U.S. grew by 4% every year from 1996 to 2012. While a graduating senior in the U.S. had an average loan of $12,750 in 1996, that number would balloon to $29,650 by 2016.
According to data from the College Board, higher education in the U.S. has become increasingly expensive over the years. Other studies also corroborate this trend; for instance, a report by the Center on Budget and Policy Priorities estimates that tuition costs in public universities rose by 36% between 2008 and 2018.
There are a number of reasons for this increase, one of which is the slashing of higher education budgets by state governments. To cater for this loss of funding, public universities have been forced to raise their tuition fees. Secondly, most universities in the U.S. employ large numbers of non-teaching staff. These hires primarily consist of administrative hires, but also include athletic coaches, and admissions counselors. Naturally, the salaries for these workers have to be factored into the fees that students are required to pay. Other reasons for the steep rise in tuition costs include the high expenses associated with maintaining federal regulatory compliance, the desire for colleges to raise their revenues, and even the misleading notion that high cost translates to better quality of education.
President Biden’s administration has recently taken a number of measures in an attempt to address the student debt crisis in the United States. One approach has been to increase access to the Public Service Loan Forgiveness (PSLF) program, whose goal is to clear federal student loans for graduates who work for at least a decade in government or in a non-profit organization.
A second initiative entails adjusting the Income-Driven Repayment program to be more accommodating, such that the loans of people who have been in repayment for at least two decades are forgiven. Other measures have included putting loan repayments and interest accrual on hold due to the COVID-19 pandemic and forgiving loans borrowers who attended certain for-profit schools that failed to adhere to federal regulations. But these initiatives are hardly sustainable, and it remains unclear whether they are robust enough to eliminate the student debt crisis in the United States at its core.
While the U.S. government has taken some steps to mitigate the student debt crisis, we need a more innovative approach to resolve the issue in the long term. Research shows that people with a four-year college degree enjoy better financial and career prospects than those without it, which means that students will continue to burden themselves with hefty loans to pay high tuition fees with the hope that they will ultimately land lucrative careers.
Our approach at Woolf is to focus on the root causes of the student debt crisis, like the ratio of student tuition spent on college administration versus teacher salary. Unless we are able to significantly reduce administrative costs in the U.S. (and around the world), new students will continue to bear the brunt with higher tuition fees that they might only be able to afford by taking out massive student loans.
Woolf is a global collegiate university that helps higher education organizations drastically reduce their tuition fees by providing a more affordable way of meeting accreditation requirements and maintaining quality standards. As research by Vanderbilt University indicates, even small colleges spend large amounts of money on accreditation and compliance. Woolf is only a small fraction of those expenses.
By using Woolf’s accreditation software, higher education organizations can drastically cut expenses related to hiring administrators to oversee regulation and compliance. A reduced expenditure in this area means larger profits, lower student tuition fees, and increased teacher salaries — all without compromising the quality of the programs offered.
