It is a contributing factor, in its own way, certainly. College is expensive because they can charge what they charge and still have to turn people away (demand far exceeds supply, driving prices up), and part of that excess demand is fueled by the availability of loans for people who otherwise would not be able to pay.
But it is also expensive because the basic costs involved in providing college is high. Not many high-demand colleges are suffering financially though, so they could easily charge less and not suffer (if they had to, but they do not because they turn away huge proportions of applicants). Smaller schools with small endowment levels often suffer.
The annual cost of federal loans to students in the US is over $1.7 trillion .
Almost half of all students will eventually default on their repayments ,and over 80 % will have some of their debt excused ,by the federal government.
Since the colleges get paid either way , your point is arguable .
What isn't arguable, is that it is a scandalous abuse of the tax payers money .
Answers & Comments
The fed backstop on student loans is definitely the point at which tuitions started getting crazy high.
It is a contributing factor, in its own way, certainly. College is expensive because they can charge what they charge and still have to turn people away (demand far exceeds supply, driving prices up), and part of that excess demand is fueled by the availability of loans for people who otherwise would not be able to pay.
But it is also expensive because the basic costs involved in providing college is high. Not many high-demand colleges are suffering financially though, so they could easily charge less and not suffer (if they had to, but they do not because they turn away huge proportions of applicants). Smaller schools with small endowment levels often suffer.
The annual cost of federal loans to students in the US is over $1.7 trillion .
Almost half of all students will eventually default on their repayments ,and over 80 % will have some of their debt excused ,by the federal government.
Since the colleges get paid either way , your point is arguable .
What isn't arguable, is that it is a scandalous abuse of the tax payers money .
I believe there's a lot more to it than that.