A Student Debt Study Through the Years

My friend Robert Brokamp, one of the stalwarts at?The Motley Fool, called my attention to an interesting The?Atlantic?article published earlier this week:?A Mystery Behind the Rise of Student Debt. The mystery is embedded in this set of observations:

??out-of-pocket spending started to slide during the ?90s. Adjusted for inflation, students contributed about $4,000 of their own money a year towards tuition at the start of that decade. By 2000, though, student contributions were down to about $3,000. They roughly stabilized until the recession, at which point they plunged once more. Today, students are paying just $2,125 out of pocket.?

The mystery, it seems, is how to explain the 25 percent decline in real (inflation-adjusted) out-of-pocket funding during the roaring ?90s, when real household incomes actually rose, unlike the 21st century (more on household income?here).

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The Atlantic article comes to no conclusion, and I have nothing definitive to offer in that regard. However, it?s useful to consider the out-of-pocket funding in the context of the long-term trend for college tuition and fees. Here is a chart of data from the relevant Consumer Price Index subcomponent reaching back to 1978, the earliest year Uncle Sam provides a breakout for College Tuition and Fees. As an interesting sidebar, I?ve thrown in the increase in the cost of purchasing a new car as well as the more substantial increase for the broader category of medical care, both of which pale in comparison.

Source: http://wallstcheatsheet.com/stocks/a-student-debt-study-through-the-years.html/

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