Graduating with Debt

Student Loans and the Rising Cost of Higher Education

Dennis A. Sun

Even at Harvard, the rising costs of post-secondary education leave students struggling to foot the bill.

“It’s like a paycheck-to-paycheck sort of process,” says Sasanka N. Jinadasa ’15 as she sits in Lowell dining hall, fingering the small elephant charm hanging from her necklace. “I get a ton of grant money from Harvard, but there is still $6,000 to $8,000 left.”

Jinadasa, who grew up in a largely working class community in Long Beach, Calif., receives approximately $50,000 in aid from Harvard each year to cover tuition, room, and board. But this sum leaves out the other expenses associated with attending Harvard—books, travel to-and-from campus—which she and her family have opted to cover with student loans. Jinadasa, who hopes to work for a non-profit advocacy organization or attend law school after graduation, has personally borrowed $14,000 so far; she expects to have incurred between $32,000 and $40,000 in loans by graduation.

She pauses in her explanation, breathing a little deeper: “I guess it is overwhelming, just knowing that I’m going to graduate with debt.”

Jinadasa is among an increasingly large number of young adults who are struggling to keep pace with the rising price of American higher education. Harvard’s cost of attendance is currently $54,496 annually, and it has been increasing at a rate of 3.5-3.8 percent in recent years. The rate of inflation in the U.S., on the other hand, was 2 percent in September of this year according to the Bureau of Labor Statistics.

If Harvard’s tuition continues increasing at 3.8 percent for the next 20 years, it will cost $114,900 in 2032. If tuition keeps pace with the current rate of inflation, it will be $80,980, roughly two thirds of this amount. Harvard’s peer institutions have been raising tuition at comparable rates to Harvard, though most of them do not come close to providing the financial aid that Harvard does. In fact, Harvard is one of only six colleges in the country that is need-blind and full-need for all applicants (that is, it does not consider financial need in admissions decisions, and meets applicants’ full financial needs). For most Americans, these tuition levels put private postsecondary education beyond reach.


Graduating with Debt

Graduating with Debt

Kelly A. Sullivan

Kelly A. Sullivan

Sasanka N. Jinadasa

Sasanka N. Jinadasa

Some—particularly economists—argue that private universities should be even more expensive than they already are.

“If a university is wealthy enough, should it be free?” asks Harvard Kennedy School professor of public policy and management Christopher Avery. “The answer to that is, I don’t think so.” His reasoning: On average, the benefits of a college education will outweigh the costs, and even those graduates with five figures of debt will “catch up very, very quickly.”

“It’s a little bit dangerous to make policy on the basis of what we hope is a long, but temporary, condition of the economy,” agrees Joshua S. Goodman, a Kennedy School assistant professor in public policy.

If anything, Goodman believes Harvard should increase its sticker price to somewhere around $150,000 a year. “Harvard should have really, really high tuition, and it should simultaneously make it as clear as possible to potential applicants that huge amounts of aid are available if their family income warrants it,” he says.

And yet Harvard is not a private for-profit company charging what the market can bear. It is “committed to making educational opportunity accessible to all,” as Harvard stated in the mission published on the admissions website.

Sociology lecturer Patrick Hamm points to this discrepancy, and warns against “subordinating higher education to the principles of the market.”

“Harvard is not a private business. It has its own stated ideals, and it has the knowledge and capability to pursue them,” continues Hamm, referring to the rising costs of a college education.

Despite universities’ public goal of opening the doors to higher education to people of all socioeconomic backgrounds, families who cannot afford their expected contributions are still left with two options: turn down an offer of admission, or take out hefty student loans.

According to the Pew Research Center’s September report on student loan debt, nearly one in five U.S. families currently holds outstanding student loans, and the average debt amount is approximately $27,000, up from $11,086 in 1992 and $17,562 in 2001. (These numbers are adjusted for inflation.) Today’s college students are both borrowing more than ever, and struggling as never before to pay off these loans.

Climbing student debt is worrisome. College costs are increasing at twice the rate of families’ incomes; this generation will graduate bearing more financial responsibility at a younger age.


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