How student loan debt ballooned to more than a trillion dollars

Federal student loan borrowers will begin making payments in October for the first time in more than three years. Over the years, more and more students have had to take out more and more loans in order to afford and stay in college. Now student debt is more than a trillion dollars.

In the early 2000s, Laurie Winter packed up her car and drove herself to Tallahassee to start her freshman year at Florida State University.

“I applied for the student loans on my own. I also got some Pell grants. I was the first person to go to college in my family so I kind of just went out and did it on my own,” Winter remembered.

Without the grants and loans, she wouldn’t have been able to graduate in 2005 with a degree in Fashion Merchandising.

“When I graduated, and I went a couple of summers too, I had $45,000 in student loans,” Winter said.

Almost 20 years later, she’s still paying on those loans. According to personal finance website NerdWallet, Winter is one of about 45 million Americans with student loan debt, totaling more than $1.76 trillion dollars.

“School just keeps getting more and more expensive,” Winter noted.

Dr. F. King Alexander is an educational leadership and public policy professor at Florida Gulf Coast University. Before coming to Southwest Florida, he was the President of multiple universities including Louisiana State University (LSU) and California State University Long Beach (Cal State Long Beach). He’s also spent decades working with US Presidents and their administrations to fund public higher education and lower student debt.

“This is a major issue,” Dr. F. King Alexander said. “We were very concerned about the student debt issue 20 years ago.”

Tuition costs over the years

Data from the National Center for Education Statistics found it cost $1,545 to attend a public, four year college during the 1968-1969 school year. That price is adjusted for inflation and includes tuition, fees, room and board. It cost about $30,000 for the 2021-2022 school year. If costs stayed in line with inflation, going to a four year college should only set a student back about $12,000 a year. Dr. Alexander blames the student debt crisis on states slashing their higher education budgets.

• READ MORE: Biden presses student debt relief as payments resume after the coronavirus pandemic pause

“The result when states don’t fund their higher education systems, which states in tax effort are down about roughly 49 percent from where they were in 1980, tuition goes up,” added Dr. Alexander. “Students end up having to cover the cost of higher education from the Baby Boomer population that has been shifting this burden onto the backs of the younger generation.”

He believes the economic consequences are endless.

“We’re creating a generation of renters and not buyers,” Dr. Alexander noted. “They’re spending less in the economy. They’re buying less cars. They’re buying less houses. You prolong the fact that they’re not going to buy a house until 10 years longer than their parents did. Many people aren’t starting families because of the debt that they have or they’re prolonging the idea of starting a family and getting married.”

Keeping student loan debt low

Right now, Dr. Alexander is working with President Biden to make community colleges tuition free.

“That will help many of our students that may start in community colleges and go to school for free, relieving them of the first two years of debt that they may have to take out,” added Dr. Alexander.

Until then, he recommends all aspiring college students look at the College Scorecard on the US Department of Education’s website. It breaks down how much students will make once they graduate compared to what the school charges so you can get the most bang for your buck…or student loan.

Don’t forget to look for scholarships before you start college. The National Scholarship Association found about $100 million goes unawarded each year, mostly because people don’t apply.