University Of Utah Student Luq Mughal paid his tuition in $1 Bills - 2,000 of them to be exact. Mughal says he did this as a silent protest against the rising cost of college.
Luq Mughal brought a metal case full of dollar bills to the school Tuesday, which was the deadline for payment. Mughal tells The Salt Lake Tribune that he spends weekends working to pay for his electrical engineering degree.
It's no surprise; undergraduate in-state tuition rates have more than doubled in Utah over the past 10 years. Trustees set a 5 percent tuition hike this year, saying they needed to fund a cost-of-living raise for employees as state funding declines. With costs for a college education rising, student loans are also inflating which is quickly approaching the $1 trillion mark.
Although Congress is well aware of the rising interest rates and making an effort to reign in those rates, some experts suggest they should be addressing the ever-increasing tuition rates as well.
For decades, tuition rates have been rising faster than the rate of inflation, and now the total debt college students and graduates owe for college education equals nearly $1 trillion, according to the Federal Reserve Bank of New York.
“I feel like we’re chasing our tail a lot because the price goes up, the amount we allow people to borrow goes up, the Pell grants go up, the amount parents are borrowing or putting aside goes up,” said Jim Kessler, senior vice president for policy at the centrist Democratic think tank Third Way. “When do we reach the point where we say, ‘OK, this thing just has to stop?’ ”
While college tuition is steadily increasing, interest rates doubled on July 1 from going from 3.4 percent to 6.8 percent on subsidized Stafford student loans. These loans account for almost 26 percent of all new federal loans in 2013, according to the Congressional Budget Office.
The late 70's saw tuition costs rising, and they've been rising at substantial levels since. Here is a short comparison for a four-year degree in 1980 and 2013 in three categories:
Tuition at a Public Institution – 1980 – $2550 - 2013 – $7196
Tuition at a Private Institution – 1980 – $5594 - 2013 – $15,786
Average Total Tuition Amount – 1980 – $3449 - 2013 – $9733
In the last decade, the situation has not improved. The rising cost of higher education has significantly exceeded the cost of living expenses and medical expenses. And although the U.S Government has made it easier for anyone to attend college with the various student loan programs offered them, they have also helped to fuel the rising cost of higher education by lending too easily.
That college degree that was once highly desired, which creates a great benefit to careers and financial life, is now less valuable because first, a higher number of college graduates make the competition stiff and second, it is much too expensive to obtain.
Student-loan debt can make it difficult to do things like buy a car or a home, said Tucker Warren, managing director of Hamilton Place Strategies. His firm argues that the increase to student loan access by the government is contributing to higher tuition rates.
The senate committee will be taking on reauthorization of the Higher Education Act at year-end, and it is expected that these issues will be addressed.
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