Student loan debt is a social and economic nightmare, having surpassed credit card debt Best & Best, 2015). By 2016, 70 percent of seniors graduate have a tuition loan debt with the average debt per graduate being $37,172 (Mitchell, 2016). Payment of such debt depends on the graduate finding a decent job. The ever increasing loan debt is a reflection of the changes in the cost of tuition. Based on the steadily increasing amount of debt students receive after graduation, and the difficulty associated with repaying student loans, the United States government should institute a cap on tuition and prices for classes. Over 40 million U.S. graduates owe an aggregate student debt of at least $1.2 trillion (Mitchell, 2016). Goodman (2011) makes a comparison of the tuition at Stanford University over a three-decade period. In 1981, the university charged $6,285 for tuition. By 2010, this had risen to $38,700. One year later, students were paying $40,050 (Goodman, 2011). In 2011, the inflation rate for tuition was 2.3%, and at least 72 colleges and universities were more expensive than Stanford.
About 70% of financial aid packages provided to students are in the form of loans (Best & Best, 2015; Goodman, 2011). The dramatic rise in tuition has been attributed to among other factors, expansion in research and development capabilities. The federal government disburses billions of dollars each year to universities towards research and development (R&D) thus R&D should not be used to justify a sharp increase in tuition. Moreover, universities operate as tax-exempt institutions, further reducing the need to regularly increase tuition and fees (Best & Best, 2015).

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One major challenge facing effective government intervention is the lack of accurate data on student loan debts. By December 2014, 129 colleges reported that their average debt loads exceeded $35,000. Forty-nine colleges reported that over 90 percent of their graduates were still in debt by the time of graduation (Bidwell, 2014). This is despite the fact that many colleges never disclose the average debt level as the law does not obligate them to do so. Lack of accurate data could mask the exact loan amount due per graduate, thus could hamper efforts to institute necessary policy changes in education.

On the bright side, however, new college graduates have, in the recent past, been finding jobs whose pay is decent and exceeds what they owe in student debt. The median salary for such graduates stands at $50,651 in 2015, up from $ 43,000 in 2014, data from the New York Federal Reserve and the National Association of Colleges and Employers indicates (Mitchell, 2016). The unemployment rate stands at just 4.6%. Despite this, many students do not have a repayment plan and are likely to default (Powell, 2016). Part of this problem is due to the leniency of the law. As a matter of fact, the American constitution, while it is active in ensuring that all eligible students receive tuition loans, does not have sufficient mechanisms to prompt the students to repay their dues once they graduate and get a job. It is a result of this that loan repayment is never a priority for most students despite them having well-paid, sustainable jobs. Therefore, it is recommended that a cap and a mandate on students to have a tuition loan repayment plan should be enacted. Besides, proper enforcement should be put in place.

Goodman (2011) reports that 367 colleges and universities in the U.S. control tax-exempt endowments whose value exceeds $100 million. Such funds can be used to cater for rising operational costs. Despite this, universities do not take into account the rise in Consumer Price Index while offloading their rising costs to the vast majority of students and parents. As long as there is no cap on the tuition loans, the universities and colleges in America will not feel compelled to invest the $100 million valued tax-exempt endowments in the higher education operations. Instead, the administrators will continue using the funds, which will continue growing, in other unwarranted purposes including raising the salaries of the workers. However, with the cap, the administrators will have no other option than to fund the higher education processes using what they have currently reserved. Nonetheless, they should be prohibited from increasing what the students have to pay regarding the academic fees.

It must be considered that the federal government solely finances the tuition loans that are advanced to the students. Nevertheless, to allocate the education loans, the government is forced to make significant cuts in other important areas of economic interest. Even though funding the student education through tuition loans is a positive move as it clearly shows that the American ruling regime is committed to helping the students to reach great educational heights, the inability of the learners to reimburse the loans is detrimental as it shrinks the ability of the government to promote development in the future. In the light of this, it is suggested that a tuition cap should be set in place. With a cap, it means that the amount of tuition loans disbursed to a student is what he or she will be able to pay in a timely manner without any difficulty. The repayment of the loans will, in turn, allow the government to make economic facilitating investments.

To a significant context, high tuition loans have contributed towards most graduates growing in discontent with the formal professional practices. At present, the level of tuition loan assigned to students is essentially high. As it has been defined earlier in this text, some students receive up to $40,050 tuition credit per year. Even with a salary of $50,651 per annum, such a level of education loan might be daunting when it comes to repaying it. It implies that out of the $50,651, a significant amount has to be deducted to finance the tuition loan. In effect, most graduates find it extremely hard to manage their personal lives thus becoming overly discontent with their professional roles. The situation is made even worse, given that there are a series of other deductions that are made from the salaries including income tax. If a cap is put in place, it means that what is provided to the students to fund their education will be limited. Thus, once they get jobs, they will not be burdened when meeting their obligations to the government.

The steady rise in tuition and prices for classes is responsible for the high student debt in the U.S. As self-policing of college costs has not been effective, and as tuition continues to rise steadily, the United States’ government needs to step in. It should tie its higher education funding to college expenditure. It should also place a cap on how much tuition should be charged to evade a potentially student-debt-instigated crisis that the nation faces soon.

    References
  • Best, J., & Best, E. (2015). The student loan mess: how good intentions created a trillion- dollar problem. Berkeley, CA: University of California Press.
  • Goodman, S. (2011, October 7). Why college tuition should be regulated. The Time. Retrieved from http://ideas.time.com/2011/10/27/why-college-tuition-should-be-regulated/
  • Bidwell, A. (2014, November 13). Average student loan debt approaches $30,000. U.S. News. Retrieved from http://www.usnews.com/news/articles/2014/11/13/average-student-loan-debt-hits-30-000
  • Mitchell, J. (2016, May 2). Student debt is about to set another record, but the picture isn’t all bad. The Wall Street Journal. Retrieved from http://blogs.wsj.com/economics/2016/05/02/student-debt-is-about-to-set-another-record-but-the-picture-isn’t-all-bad/
  • Powell, F. (2016, May 9). 10 Student loan facts college grads need to know. U.S News. Retrieved from http://www.usnews.com/education/best-colleges/paying-for-college/slideshows/10-student-loan-facts-college-grads-need-to-know