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What is driving up college costs and student loan burden.

Advancement in technology, Reduced State Aid and Increased Demand.

There are several factors that are driving college costs higher each year. Many people are worried about the growing college costs, saying that costs are going up because of the increase in government financial aid to students and also saying that students borrow more than they need, hence colleges increase their costs to take advantage of this available money.

However the real causes of increases in college costs are different. Technology advancement has caused great efficiency in manufacturing and other industries and this has overshadowed growth in productivity advanced technology brings to higher education. Therefore relatively, colleges seem to be more expensive and less cost effective than other industries.

Reduction in State spending in education has left colleges with no other way to cover their cost other than increase their tuition and other costs. In the 1960ís, Local Governments provided more than 50% of cost of higher education and Federal Government provided 10%. However in recent years, the proportion of college costs covered by Local Governments has reduced to 30%. So although the cost of providing education has not gone up so much, colleges still have to increase tuition to cover for the reduced support from Local Governments.

College graduates are also less likely to be unemployed because most emerging jobs are now more skilled than in the past. So access to college for all is becoming a necessity and this puts increased demand on the available college facilities and force them to expand, which costs money.

While students are being required to borrow more and more money to cover for their education, a college degree is still very valuable. Studies have shown that people with college degree make about one million more than people with a high school certificate.

While it is true that some students borrow more money than necessary, these are in the minority. Most borrow a manageable amount and recent laws have made it easier for students to have manageable monthly payments, depending on their earnings and if they cannot pay the whole amount, it may be forgiven.


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