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Painful Tuition Hikes on Low-Income Homes - 3/3/16

Perhaps not surprisingly, students from the poorest households are shouldering a disproportionate share of the pain from rising college costs.  As reported in the Wall Street Journal, they are borrowing at far higher levels as a share of family income than ever. 

It is now the norm for U.S. students from the lowest income bracket to borrow at least half of their household income to attend most four year colleges.  At nearly sixty percent of four year colleges that produce sufficient quantities of data, students from households earning thirty thousand dollars or less a year left those schools during the twenty thirteen and twenty fourteen school years owing a median of fifteen thousand dollars or more in total debt. 

Ten years ago, only about eighteen percent of four year institutions had such high debt burdens among students in the same income bracket.  Tuition increases are one of the main drivers of rising debt.  Among four year schools with analyzable data, the average increase in tuition and fees was greater than seventy five percent over the past decade, easily outpacing general inflation.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.