Critics of President Joe Biden's student loan forgiveness program think the real problem is the dramatic rise in college tution in recent years. | Unsplash/Rochelle Nicole
Critics of President Joe Biden's student loan forgiveness program think the real problem is the dramatic rise in college tution in recent years. | Unsplash/Rochelle Nicole
Statistics show that the average annual rate of college tuition inflation is 8%, with the cost of public U.S. universities nearly tripling since 1980.
In North Carolina, the cost of college for both in- and out-of-state students has risen in just the last year.
Mike Pompeo, former CIA director and 70th U.S. Secretary of State, along with other budget experts, say President Joe Biden's recently announced student loan forgiveness plan is only going to raise tuition even higher for future generations.
"Joe Biden isn't forgiving student loan debt, he's subsidizing college tuition. This one-time giveaway is only going to raise tuition for future generations," Mike Pompeo said in an Aug. 24 tweet.
The Education Data Initiative reports that as of January 2022, in-state tuition and fees for a public four-year university in North Carolina climbed 0.75% in the last year. The cost for out-of-state tuition and fees climbed 1.69% during the same time frame. The average cost for room and board jumped a combined 7.16% in the last year.
During the 2021-22 academic year, the average annual cost of tuition and fees at a public four-year college was $10,740 for in-state students and $27,560 for out-of-state students, according to Bankrate. The average annual rate of inflation for college tuition is currently 8%.
Several experts told Fox Business that Biden's plan is expected to cause a hike in college tuition prices and actually add to the inflation crisis.
"Students will likely feel liberated to borrow more money on the assumption of future loan forgiveness, and universities will take advantage of the additional borrowing by raising tuition," Brian Riedl, a senior fellow in budget, tax and economic policy at the Manhattan Institute, told Fox Business News. "This is pretty similar to the fact that historically 60% of all student aid increases have been captured with tuition hikes, and this will be treated like an increase in student aid moving forward, which suggests that 60% will be countered by tuition hikes.”
National Center for Education Statistics data shows that between 1980-81 and 2020-21, the cost of attending a four-year college — including tuition and fees, plus room and board, and adjusted for inflation — has soared from $10,631 annually to $29,033 annually in the U.S., "representing a 173% increase in the last 40 years," according to Bankrate.
According to the Education Data Initiative, college tuition has increased by 747.8% since 1963 after adjusting for currency inflation.
The Committee for a Responsible Federal Budget estimates that Biden’s loan cancellation plan will cost between $330 and $390 billion, and that his full student debt plan will cost $440 to $600 billion. The plan is said to be merely a short-term fix. The Committee says it will temporarily wipe out nearly a third of the student debt portfolio, "but the sum of student debt will return to its current level in five and a half years, by 2028.”
According to Fox News, Biden announced Aug. 24 that for borrowers making less than $125,000 a year, he will cancel $10,000 of federal student loan debt. For borrowers who attended college on Pell Grants, Biden's forgiveness extends up to $20,000 in student loan debt. In addition, Biden has extended pandemic-era payment freezes through the end of December.
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