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Federal help hasn't kept pace with skyrocketing education costs, figures show

Public college was about $15,000 cheaper in 1980
Posted at 5:43 PM, Aug 25, 2022
and last updated 2022-08-25 17:54:46-04

WEST PALM BEACH, Fla. — While forgiving federal loans will provide substantial relief to millions of borrowers, it's not changing the rising cost of tuition.

WPTV took a closer look at the increasing cost of higher education and where federal support has failed to keep up.

In 1980, the average cost of tuition for a public four-year university not only was about $15,000 cheaper than it is today, but you had a chance at having 80% to 100% covered by federal grants.

RELATED: Who is eligible for federal student loan forgiveness?

What we found is while the cost of higher education has increased drastically in the last four decades, the maximum grant money offered has only gone up about $1,000 to $2,000.

Location, education and sports are how Alyana Gonel ranked her priorities when picking a university.

Alyana Gonel, college student in Florida who has loan
Alyana Gonel is among the thousands of college students who have loan debt from education costs.

But even with a scholarship to play soccer, her education is costing her.

"For the next 15 years, I have to pay off my loans, which is a lot," Gonel.

RELATED: What happens next after President Biden's student loan announcement?

And if you ask other local college students, racking up debt is a part of life as college tuition continues to rise.

"The grants, the things you don’t have to pay back like Pell grants, haven't really kept up with that increase," Jacob Channel, senior economist at Student Loan Hero, said.

The value of Pell grants offered has not really changed in the last 10 years and the disparity between tuition cost and federal help has grown drastically, according to the White House.

Jacob Channel, senior economist at Student Loan Hero
Jacob Channel, a senior economist at Student Loan Hero, explains how the grants offered by the federal government hasn't kept pace with rising college tuition costs.

RELATED: How to apply for student loan forgiveness

"So, if you go back to 1980 for example, not only was college less expensive, there may have been more grants from the government that you could take that would cover the cost without having to dip into a loan," Channel said.

The average federal student loan borrower in Florida owes around $38,000. The state's total debt is around $100 billion with 2.6 million student borrowers living in the state. Almost half of those people are under the age of 35.

"It's hard having that on the back of your mind," college student Joanne Frederic said. "It's really stressful."

While the legality of loan forgiveness could be challenged, Channel said this can alleviate a huge burden to student borrowers drowning in debt.

"That will free them up — in the future anyway — to be able to maybe more easily qualify for things like a mortgage because they've got less debt overall," Channel said.

Keep in mind that if you already have private student loans, there's no relief, and borrowers will have to pay that money back in full.

Also, the rule on paying back federal loans is changing. It will now be an income-driven repayment plan and borrowers are only required to pay 5% of their discretionary income. In the past, it was 10%.