In the U.S., average debt at graduation rose to $25,250 in 2010, according to a Nov. 3 report by the Project on Student Debt. Here in Canada, students were graduating with an average debt of $26,680 according to a 2009 report released by the Millennium Scholarship Foundation. If anything, the Canadian average is higher now.
The numbers seem almost impossible: isn’t tuition ridiculously high in the U.S.?
The explanation that follows won’t be a surprise to readers of this blog — the high tuition sticker prices in America bear little relation to the cost of education. Whereas much of Canadian aid goes to the institutions themselves, most American aid is provided on the other side of the price tag with direct-to-student aid in the form of tax breaks and grants.
This shift in where the discounting is applied has accelerated in the U.S. over the past 10 years, with state’s institutional funding falling away as federal direct-to-student funding has increased, with the odd effect that while the 10 year cost to students is fairly stable for state institutions, the sticker price has increased dramatically.
Part of me thinks there’s a conservative genius at work here in America with the restructuring of student aid — the shift gives the appearance of out of control institutions with runaway spending in deep need of fiscal conservative tough love.
We’ve got problems, sure. But that narrative is not quite right.