The Rising Cost of a College Education

Mike Ginsberg

Today, the Wall Street Journal reported that the rising cost of a college education – and the debt some families incur to send a student to school – is emerging as an important topic in the 2016 presidential race. Finally, candidates are focusing on the real causes behind this burgeoning dilemma, and they’re not pointing fingers at the debt collector.

Republican and Democratic contenders alike recognize the issues associated with the rise in college costs, but they have different viewpoints when it comes to the culprit and solutions to this problem. According to the article, Republicans point to easy access of federal student loans for the escalating college tuitions and are campaigning to lower tuition. Sen. Rand Paul (R-Ky.) wants to enable college students to deduct the cost of their education. Sen. Marco Rubio (R-Fl.) is touting investors to cover the costs for students as a piece of their future earnings, an approach that is popular in South America. While campaigning in Iowa, Hillary Clinton said that it was critical to “move toward making college as debt-free as possible.” Other candidates are floating similar ideas, but not one has accused bill collectors of being the reason behind this mushrooming dilemma.

This topic of escalating student loan debt is not a new one and will only gain attention over the next 18 months leading up to the presidential election. A study published in May 2014 declared the graduating class of 2014 the most indebted graduating class to date. However, they were recently dethroned by the graduating class of 2015, and each of the coming graduating classes is expected to exceed their predecessors. While the delinquency rates of other loan types have been dropped, student loans continue to increase as the following chart illustrates:

Those in the U.S. accounts receivable management (ARM) industry know of the negative press that’s been placed on the Department of Education contract in recent months.  For now, the attention is off the collection agency.  Let’s hope it stays that way.