As the U.S. Supreme Court (SCOTUS) hears a challenge to President Joe Biden’s plan to forgive up to $20,000 in student loan debt for millions of borrowers across the United States, some economists say easy-to-obtain student loans from the federal government may be the cause of the problem in the first place.
According to the Education Data Initiative, average college tuition and fee rates in the United States have increased 130% since 1990 after adjusting for inflation. Without adjusting for inflation, tuition has risen by around 425%.
Americans now owe almost $1.75 trillion in student loans. Through an executive order, Biden created a debt forgiveness plan in August 2022, two months before the recent midterm elections.
If approved, the plan would forgive up to $20,000 in federal student loan debt to Pell Grant recipients and up to $10,000 to all other federal student loan borrowers with individual incomes less than $125,000 or household incomes less than $250,000.
After state attorneys general challenged the legality of the plan, lower courts placed it on hold. The Biden administration initially paused student loan payments and interest during the COVID-19 pandemic and has since extended the moratorium again several times. Currently, payments and interest are set to resume by the end of June.
On Tuesday, the SCOTUS heard over three hours of oral arguments for and against the debt cancellation plan. According to Politico, most of the SCOTUS justices appeared skeptical of the plan and questioned whether the U.S. Department of Education has the legal authority to discharge federal student loans.
Federal officials estimate the Biden student loan cancellation plan would cost the country a total of $300 billion over the next 10 years.
Economists: Easy student loans increase tuition over time
According to Troy University Johnson Center for Political Economy director Allen Mendenhall, the availability of student loans has incentivized universities to raise tuition prices.
“The ready availability of federal student loans historically increased the supply of students,” Mendenhall said. “Universities responded by increasing the price of a college degree. This example is the perfect illustration of the economic reality that supply curves slope upward.”
Charles G. Koch Professor of Economics with the Johnson Center Dan Sutter agreed, noting statistics from institutions not eligible for federal loans.
“Federal student loans encourage states to reduce funding and let universities raise tuition,” Sutter said. “Empirical research comparing similar programs that are and are not eligible for federal loans confirm that the loan program is responsible for at least some of the increase in inflation-adjusted tuition.”
Where has tuition in Alabama increased the most?
So, where do Alabama public schools stand?
1819 News collected data from 13 four-year state-funded universities from the website CollegeCalc, which documented tuition rates from the U.S. Department of Education’s 2022 IPEDS survey for the 2021-2022 academic year.
CollegeCalc also records in-state and out-of-state tuition from 1987 to 2012.
By comparing tuition rates from 1990 to 2021, 1819 News calculated roughly which schools have increased tuition the most. This does not account for increases instituted for the 2022-2023 school year, which is currently in session.
CollegeCalc did not list data for Athens State University, the only four-year public university in Alabama not listed in the following rankings.
1819 News ranked the schools from highest to lowest based on the percent increase in in-state tuition from 1990 to 2021. These statistics are not adjusted for inflation.
#1) University of North Alabama
1990 In-State Tuition: $1,152
2021 In-State Tuition: $9,600
Percent Increase: 733.33%
1990 Out-of-State Tuition: $1,608
2021 Out-of-State Tuition: $19,200
Percent Increase: 1,094.03%
#2) Jacksonville State University
1990 In-State Tuition: $1,200
2021 In-State Tuition: $9,720
Percent Increase: 710%
1990 Out-of-State Tuition: $1,800
2021 Out-of-State Tuition: $19,440
Percent Increase: 980%
#3) Alabama State University
1990 In-State Tuition: $1,074
2021 In-State Tuition: $8,328
Percent Increase: 675.42%
1990 Out-of-State Tuition: $2,034
2021 Out-of-State Tuition: $16,656
Percent Increase: 718.88%
#4) University of West Alabama
1990 In-State Tuition: $1,275
2021 In-State Tuition: $9,100
Percent Increase: 613.73%
1990 Out-of-State Tuition: $1,275
2021 Out-of-State Tuition: $18,200
Percent Increase: 1327.45%
#5) University of Montevallo
1990 In-State Tuition: $1,744
2021 In-State Tuition: $12,090
Percent Increase: 593.23%
1990 Out-of-State Tuition: $2,884
2021 Out-of-State Tuition: $25,110
Percent Increase: 770.67%
#6) Auburn University
1990 In-State Tuition: $1,476
2021 In-State Tuition: $10,080
Percent Increase: 582.93%
1990 Out-of-State Tuition: $6,750
2021 Out-of-State Tuition: $30,240
Percent Increase: 582.93%
#7) Auburn University Montgomery
1990 In-State Tuition: $1,074
2021 In-State Tuition: $7,992
Percent Increase: 557.78%
1990 Out-of-State Tuition: $2,034
2021 Out-of-State Tuition: $17,952
Percent Increase: 418.1%
#8) Troy University
1990 In-State Tuition: $1,435
2021 In-State Tuition: $9,312
Percent Increase: 548.92%
1990 Out-of-State Tuition: $2,099
2021 Out-of-State Tuition: $18,624
Percent Increase: 787.28%
#9) University of Alabama
1990 In-State Tuition: $1,725
2021 In-State Tuition: $10,780
Percent Increase: 524.93%
1990 Out-of-State Tuition: $4,260
2021 Out-of-State Tuition: $30,250
Percent Increase: 610.09%
#10) University of Alabama Huntsville
1990 In-State Tuition: $1,815
2021 In-State Tuition: $9,730
Percent Increase: 436.09%
1990 Out-of-State Tuition: $3,630
2021 Out-of-State Tuition: $22,126
Percent Increase: 509.53%
#11) University of Alabama Birmingham
1990 In-State Tuition: $1,074
2021 In-State Tuition: $8,568
Percent Increase: 370.25%
1990 Out-of-State Tuition: $2,034
2021 Out-of-State Tuition: $20,400
Percent Increase: 487.56
#12) University of South Alabama
1990 In-State Tuition: $1,875
2021 In-State Tuition: $8,256
Percent Increase: 340.32%
1990 Out-of-State Tuition: $2,475
2021 Out-of-State Tuition: $16,521
Percent Increase: 567.15%
#13) Alabama A&M
1990 In-State Tuition: $1,248
2021 In-State Tuition: $5,012
Percent Increase: 301.68%
1990 Out-of-State Tuition: $2,236
2021 Out-of-State Tuition: $9,317
Percent Increase: 316.68%
Unknown: Athens State University
Some universities would have ranked higher on the list if out-of-state tuition was the determining factor. Some schools, such as Auburn, appear to have maintained the same rate of increase in in-state and out-of-state tuition, but most schools raised out-of-state tuition at a higher rate, with the exception being Auburn University Montgomery, whose in-state tuition has increased at a higher rate than its out-of-state tuition.
Per these statistics, the average increase in in-state tuition in Alabama was 537.58%. For out-of-state tuition, it was 705.41%. Those two rates average out to 621.5% — almost 200% higher than the national average.
“If colleges were at least partially responsible for the debt that students incurred to finance a degree they never earned because they dropped out, then the cost of college would plummet,” Mendenhall said.
To connect with the author of this story or to comment, email will.blakely@1819news.com or find him on Twitter and Facebook.
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