By Michelle Chen
With tuition costs more than doubling over the past generation, and student debt now exceeding $1 trillion, everyone knows the cost of college is too damn high. About 40 million people nationwide are weighed down by education debts that often reach into the tens of thousands. But those numbers are just a sliver of the bleak shadow that Wall Street casts over higher education.
A new study on debt across the higher education system reveals that the massive debts borne by both students and their institutions has climbed to about $45 billion per year. So the debt-related payments to the financial sector—including Wall Street investors, institutional lenders and the mammoth federal student loan system—drive about one tenth of all spending on higher education nationwide. These debt-servicing costs are tied to tuition lending as well as financial debts accrued by schools themselves, which finance investments of all kinds, from professors’ salaries to libraries to indulgences like sports teams and administrators’ bonuses.