“Tuition increased substantially between 1995 and 2017, and that increase put upward pressure on borrowing,” said the CBO. “(Some research indicates that the expansion of the federal student loan programs has induced colleges and universities to increase tuition.) For example, the average published in-state tuition — also known as the sticker price — for public, four-year undergraduate institutions increased by 120 percent (adjusted for inflation) over that period. The average published tuition for not-for-profit private institutions increased by 76 percent.”
“The increase in students’ ability to borrow may have induced colleges to increase their tuition,” said the report.
So, federal student loans caused money to flow as follows: Jim worked as an auto mechanic and, along with millions of other hardworking non-college-educated Americans, paid federal taxes. The federal government took some of that money and sent it to Harvard and other colleges in the form of student loans. The government attributed these loans to people like Jill — the sister Jim did not know — as payment for their tuition.