That Increasing College Tuition Doesn’t Go Toward Educational Improvements

Currently, Americans have more than $1 trillion in student loan debt. While some politicians are exploring why education comes at such a high cost, one often overlooked reason for the pricy tuitions is that colleges go into massive debt themselves. Across the country, schools are borrowing money from educational loan companies, no different than their students, reports The Nation.

Yes, the same private entities that make a killing off of student loan debt are loaning money and charging interest to the universities these students are attending as well. It’s a smart – if not totally unscrupulous – business move, too, since the schools then hike tuition costs to cover their own expenses, thus increasing the amount that students must borrow. It’s a vicious cycle with one clear victor: Wall Street.

This debt cycle would make at least a little bit of sense if the money were going toward improving the standard of education at the colleges. However, according to research by the University of California-Berkeley’s Debt & Society Project, the huge amounts that schools are borrowing are rarely applied to education, teaching, or even maintaining existing campus buildings. Throughout all institutions, only about 25% of borrowed money is designated toward instruction or expenditures related to instruction.

Instead, the money is allocated to new sports stadiums and state-of-the-art dormitory buildings. These non-essential “improvements” are meant to beautify campuses and make them cooler, not make their students smarter or more prepared for the workforce. In many cases, colleges consider these amenities an investment in their own brand. By offering luxuries and flashy buildings, they can charge more for students to attend, regardless of the value of the education.

If you assume that this debt problem applies to only costlier, private institutions, think again. Public schools are far from immune: students attending public universities today have twice the debt that students attending a decade ago accrued. For-profit colleges are perhaps the worst deal of all. In addition to sending their students into debt, many of these schools are charged with providing thoroughly inadequate educations to their pupils.

Ultimately, the constant frills and facelifts colleges implement for themselves only helps to further widen the inequality gap. Students in search of a topnotch education can no longer afford a tuition that includes unnecessary “perks” as part of a package deal. Higher education should not only be accessible to students with wealthy parents… or those who are willing to go into lifelong debt to pay for the privilege of learning alongside the elite.

We can’t continue to criticize poor people for not getting an education to improve their career opportunities when an education is not actually accessible or affordable to them. Moreover, we can’t continue to criticize poor people for living outside of their means when we force them to pay for sports stadiums and luxury housing just to get a college degree that people will respect.

It’s heartbreaking to realize how much student loan debt has nothing to do with educating future generations of Americans. The more that universities turn into summer camps for rich kids, the worse this problem will get.


BJ J3 years ago


Fi T.
Past Member 3 years ago

Money can't buy everything

Debra G.
Debra G3 years ago

We conclude by discussing the potential risk of student loan borrowers or colleges becoming unable to afford rising finance costs." So - colleges expanded in 1970-2000, funded by bonds. Servicing these debts became more difficult as state support decreased - "The new report's findings support many of higher education officials' assertions about state financing, including that states have cut their spending more sharply on higher education than on prisons or Medicaid" ( Inside Higher Ed)

How else can they fund themselves? Public-private "partnerships" - thus, two of the six private charitable foundations the Koch brothers control and personally fund combined in 2012 to infuse colleges and universities with more than $12.7 million, according to a Center for Public Integrity analysis of Internal Revenue Service tax filings. And what do they teach? They proselytize government deregulation and pro-business civics.

Debra G.
Debra G3 years ago

I, too, used to think of sports as unnecessary to an academic institution. Then I found out (from a discussion with some regents) that football is usually the biggest revenue generator for many universities. Also, be aware that Operational costs (day to day costs like maintenance and salaries) are SEPARATE from physical plant costs (buildings - including the ones named for their donors).

The key points of the article are summarized:" First, we provide a brief history of U.S. higher education financing to illustrate the expanding role of capital markets in higher education. Second, we show that the aggregate costs of institutional borrowing have increased as both private nonprofit and public colleges have taken on ever-greater debts. We note that community colleges in California used this debt to offset state funding cuts. Four-year public and private colleges, on the other hand, used the largest shares of their borrowing to invest in amenities like recreation centers, dining halls, dormitories, and athletics. Third, we show how equity markets capitalized a massive expansion of for-profit colleges and their profits without producing a commensurate number of graduates. Notably, the 15 largest of these corporations received between 66 percent and 94 percent of their revenue from federal student aid programs in 2010. Fourth, we document the rising aggregate interest costs associated with increasing reliance on student loans to households. We conclude by discussing the potenti

Adam Schmidt
Adam S3 years ago

The problem is too much government. Do your research.

Danuta Watola
Danuta W3 years ago

thank you for sharing

Nils Anders Lunde
PlsNoMessage se3 years ago


ERIKA S3 years ago


Julie Cannon
Julie C3 years ago

Thanks for sharing.

JL A3 years ago

thank you for illuminating the factors that are beyond students' control