Why has tuition increased markedly more than inflation?
The interplay between multiple factors complicates the situation, but we do know that the increases in tuition correlate very well with revisions to the Higher Education Act of 1965. As students are allowed to borrow more, medical schools increase tuition prices to maximize revenue. The Higher Education Act of 1965 was reauthorized in 1968, 1972, 1976, 1980, 1986, 1992, 1998, and 2008, each time with increased borrowing limits. Current authorization for the programs in the Higher Education Act expires at the end of 2013. The three main programs that medical students depend on are the Stafford Subsidized, Stafford Unsubsidized, and the Grad-PLUS loan. The Grad-PLUS loan was added in 1986 and initially allowed borrowing of $4,000 annually and $20,000 aggregate. In 1994, this amount increased the amount available for borrowing to “cost of attendance minus aid received.” The PLUS program was created so that medical student’s families could borrow on their behalf- the unintended consequence
