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Student debt: What's been driving college costs so high, anyway?

Average tuition at public four-year colleges rose 73 percent from 1999 to 2009, even as median family income fell about 7 percent. Tuition at private colleges outpaced income, too. Here's why.

President Obama speaks to students at Washington-Lee High School in Arlington, Va., about his efforts to keep interest rates low on student loans.

J. Scott Applewhite/AP

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Aaron Marks graduates this spring with a business degree from a good college, Carnegie Mellon University in Pittsburgh, and, unlike many of his classmates, a good job.

He also has $191,000 in student loan debt.

Mr. Marks's debt is extraordinarily high, but stories like his abound. Two-thirds of students graduate with debt, to the tune of $25,000, on average.

Keeping interest rates low on federally subsidized student loans – a challenge that has lately occupied Washington – would make only a dent in what student borrowers owe. Hence, the conversation is beginning to shift to the other side of the equation: the rising cost of college.

Between 1999 and 2009, tuition at public four-year colleges rose 73 percent on average, and tuition at private nonprofit colleges jumped 34 percent. In the same period, median family income fell by about 7 percent.

"One of the reasons we have a hard time wrapping our arms around [the college affordability issue] is that there's not one villain or one hero," says Patrick Callan, president of the Higher Education Policy Institute, a nonpartisan organization focused on higher ed issues. "It's kind of the perfect storm."

Among the contributing factors: state budget cuts, which prompted many public colleges to raise tuition and fees; a gradual shift of responsibility for payment from government to students and their families; and a "seller's market" in which colleges can raise tuition without repercussions.

Until relatively recently, a college degree was fairly affordable, especially if a student was willing to work and to attend an in-state public school. That started to change in the 1980s. But in the past decade, the cost of a college education has skyrocketed, rising faster than inflation – faster even than health-care costs.


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