A Trillion Dollars and Counting

Since the 1970s, college tuition has risen higher than the costs of food, gasoline, housing, and medical care.  Student college debt in 2012 averages about $25,000 per student. Of the 37 million Americans with outstanding student loan debt in 2012:  • Almost 40% of these borrowers are under the age of 30. • Nearly 42% are between the ages of 30 and 50. • 17% are older than 50. • Borrowers of age 30-39 carry $307 billion in student loans, followed by those under 30 at $292 billion, $154 billion in the 40-49 age group, 50-59 at $106 billion and the over 60 category carrying $43 billion, for a total outstanding debt of $902 billion.

The students at Moorhead State were hardly the only one who had growing difficulty paying for their college education.  This was national problem.  As a national study compiled by the U.S. Department of Education, noted:

"The 1990s brought college tuition and fee increases that outpaced both inflation and growth in the median family income.  At the same time, federal, state, and institutional financial aid to students expanded, and important changes were made in the structure of the financial aid system.  At the federal level, the 1992 Reauthorization of the Higher Education Act expanded students’ eligibility for need-based aid, raised student loan limits, and introduced unsubsidized loans for students regardless of their need.  The resulting increase in borrowing has been one of the most dramatic changes in financial aid in the decade.  Also during the 1990s, the federal government began to use tax credits to ease the burden of paying for college.  States and institutions increased their grant programs, as well as the amounts awarded based on merit or a combination of merit and financial need, rather than need alone.  As a result of these trends and events, the overall picture of what and how students pay for college has changed substantially since the early 1990s.”

Despite the Federal and state efforts, tuition continued to go up faster than inflation.  By the late 1990s, when MSU's administration compiled results of exit interviews with graduating seniors, students were reporting that they owed an average of $16000 in student loans when they graduated.  Similarly, freshman and sophomore students who were interviewed when they withdrew from classes gave "the high cost" of tuition as one of the primary reasons for dropping out.  "It just takes a little crisis -- a medical bill, or a big bill for fixing the car -- and you just can't go on," said one student who had to leave campus.

The switch in classes from a quarter system to semesters was quickly welcomed by most students when it became apparent that the earlier end of Spring term allowed them to look for a summer job sooner than they could in the quarter system.  "We needed that chance to make more money," a student explained to one of his professors in about 1996. 

But the debt loads on most students continued to grow, and by the end of the 1990s, a new problem was becoming apparent -- forced to worked more and more hours while taking classes, more and more students were taking fewer classes per term; they simply did not have the time to work, study, and rest like normal persons.  At that point MSU began to consider altering its courses (reducing 4-credt classes to 3-credits, changing class times, increasing night classes and on-line classes, even changing liberal arts requirements).  The Moorhead State Alumni Association and the MSU Foundation began to make student scholarship funding the focus of their fundraising efforts.  "A $500 grant can make the difference between a Dean's-list student and a drop-out," a Foundation memo noted.  The efforts brought in more donations, but expenses continued to grow.  Energy costs only added to the challenge.  As fuel oil and gasoline prices steadily rose, the increased burden to the students was matched by the expenses that MSU paid to heat buildings.

By 2001, the average debt load on MSU students (upon graduation) exceeded $20,000.  In the decade since, it has continued to increase by some 30 percent (see chart above).

Note:  Student loan statistics chart is compiled from the 2012 findings of the Federal Reserve Bank, New York Branch.  For the quote concerning rising tuition in the 1990s, see Paying for College -- Changes Between 1990 and 2000 for Full-Time Dependent Undergraduates (US Department of Education 2004).