Myths & Facts: Student Debt Crisis

"Fox News often promotes myths about student loan debt in the United States, misinforming about everything from the lack of protections borrowers receive, to the unsubtantiated claim that student loans drive up college costs, to the myth that struggling borrowers are taking a government handout," Media Matters for America reports.

"Since 2012, Fox News Has Pushed Numerous Myths About Student Loan Debt...

MYTH: Student Loans Drive Up College Costs

Fox's Andrea Tantaros: Expanding Student Loan Availability Drives Up College Costs. On the November 30, 2012, edition of Fox News' The Five, co-host Andrea Tantaros argued that making "cheap credit readily available" allowed colleges and universities to "hike up [their] tuitions every year." Tantaros went on to ask, "should every kid really be going to college?" Co-hosts Eric Bolling, Brian Kilmeade, and Dana Perino all agreed that expanding loan availability for students and families was a fiscally irresponsible decision. [Fox News, The Five, 11/30/12 via Media Matters]

FACT: Increased College Costs Are Not A Result Of Student Aid

National Association Of Student Financial Aid Administrators' Justin Draeger: Theory That Increased Student Aid Drives Up College Costs 'Is Not Founded In Reality.' In a post for University Business, Justin Draeger of the National Association of Student Financial Aid Administrators stated that the myth that 'increases in student aid drive up college costs' is one that lawmakers use 'when justifying proposals to cut federal student aid spending.' Draeger continued: 

'Essentially, the budget resolution would reduce federal funding for student aid by eliminating student loan subsidies and limiting student eligibility for Pell Grants and other federal aid.

But this theory is not founded in reality. In testimony before the House Education and the Workforce Committee, Education Secretary Arne Duncan noted that college costs increase even when the government reduces student aid spending or keeps it level. There is conflicting evidence on the correlation between the federal student aid spending and increases in college costs and absolutely no research that indicates a causal relationship.

There are several factors that drive up college costs. Two economic professors at The College of William & Mary conclude that the primary forces driving up college costs are the technological changes that have reshaped the entire global economy over the past century. David Feldman and Robert Archibald are co-authors of Why Does College Cost So Much? (Oxford University Press, 2010). Their book explains that the most important engine of cost growth in higher education is the very thing that is driving costs down in other industries: technological advancement. Technology advances have caused productivity growth in some industries, like manufacturing, to overshadow productivity growth in other industries, including higher education. [University Business, May 2012, empahsis added]'"

NASFAA's "Financial Aid in the News" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.