We always read stories about college students constantly trying to dig themselves out of debt. There are always complaints about how these colleges and universities raise their tuitions, sometimes bi-yearly.
It turns out that there is a good reason that tuition continues to rise- Colleges are in huge debt themselves.
“Overall debt levels more than doubled from 2000 to 2011 at the more than 500 institutions rated by Moody’s, according to inflation-adjusted data compiled for The New York Times by the credit rating agency. In the same time, the amount of cash, pledged gifts and investments that colleges maintain declined more than 40 percent relative to the amount they owe.”
Colleges have little choice but to raise tuition- which in turn raises the debt of its students.
This would be understandable, but the debt of the schools is only on the rise. Someone needs to come up with a better plan then simply redistributing the debt.
Paul Hudson | Elite.