In the spring of 2021, $600 stood between Endele Wilson and his dream of achieving a teaching credential from Long Beach City College.

Wilson, 47, started taking courses in 2019, a few months before the pandemic hit and just before he lost his job as an elementary school music teacher. He took on multiple jobs as a musician, and an overnight shift at a gas station, to support his eight children.

When he was about 18 units away from completion, he got the bill that stopped him in his tracks. He didn’t qualify for financial aid, he said, because of low grades years ago at another community college. He was confronting $600 in unpaid enrollment fees — and couldn’t register for classes until he settled the balance.

The college would, effectively, force him to drop out.

“I didn’t know what to do,” Wilson recalled. “Even working two jobs, I don’t make enough money to do anything but survive.”

“Too many students are struggling with hardships that make even modest debts a barrier to enrollment in community colleges.”

Eloy Ortiz Oakley, chancellor, California Community Colleges

Enrollment at California Community Colleges has plummeted nearly 20% during the pandemic to about 1.3 million students from fall 2019 to fall of 2021, according to state data, leaving campuses worried about their future and potential students with fewer of the opportunities offered by higher education. Pandemic-related hardships have propelled many students to choose jobs over education and online classes have been barriers for low-income students without digital resources.

But new research suggests colleges’ own policies around unpaid balances may also be contributing to the decline while creating lasting financial harm for the institutions and students.

A report published Thursday by the Student Borrower Protection Center, a nonprofit advocacy group focused on student debt, attempts to quantify the scope of this problem. Using data from three California Community College districts and student demographic information, researchers estimate that, from July 2020 to June 2021, some 321,000 community college students accrued a collective $107 million in debt to their campuses.

Researchers projected estimates for the system based on the percentage of students affected in Compton, Lake Tahoe and Peralta Community College Districts. The report was provided jointly to The Hechinger Report and the Los Angeles Times.

In addition, The Hechinger Report obtained data from seven community college districts, representing 19 of the 116 community colleges in the California system. Though there is variation in what each district tracks, the data shows tens of thousands of students in debt to their community colleges, roughly in line with the researchers’ estimate.

The records obtained by The Hechinger Report include data on a range of institutional debts from colleges and districts including Evergreen Valley College in San Jose, the three-campus Contra Costa College District, the nine-campus Los Angeles Community College District and the three campuses of the Coast Community College District in Orange County. 

The pain from these debts is not felt evenly, researchers said.

“They impact low-income students at a much higher rate,” said Charlie Eaton, assistant professor of sociology at the University of California-Merced and co-author of the report. “These debts are widening inequalities in who gets a degree and it inflicts financial turmoil.”

Related: Public colleges shock students by sending them to costly debt collection agencies

When students owe money to their colleges — even small amounts — they can be barred from re-enrolling. Schools can refer students to state tax collectors to have their tax refund garnished or send them to debt collection companies, which often charge high fees. Colleges often don’t recoup much money and former students can have their credit destroyed.

Students accrue the debt for a number of reasons, according to experts and college officials. Sometimes, they enter into a payment plan for tuition and can’t keep up. Other times, they’ve paid tuition in full, but owe money for overdue parking, library or housing fees. Sometimes students owe a fine after failing to return a computer or calculator on time.

The number of students in this situation likely grew during the pandemic, Eaton said, although it’s difficult to know by how much. It’s not known how many students wanted to re-enroll but were prevented from doing so because of their debt. The California Community College Chancellor’s Office does not track this information. Nor does it keep tabs on what happens to a student in debt. It also doesn’t regulate how colleges handle unpaid fees.

Researchers estimate that, from July 2020 to June 2021, some 321,000 community college students accrued a collective $107 million in debt to their campuses.

Chancellor Eloy Ortiz Oakley acknowledged the problem.

“Too many students are struggling with hardships that make even modest debts a barrier to enrollment in community colleges,” he said, adding that he encourages colleges to use their federal relief money to clear student debt.

Oakley said that community college students who needed financial assistance during the pandemic are some of the “most deserving recipients” of federal relief.

“Helping community college students, many of whom are trained to be frontline pandemic fighters, continue their educations is a great investment for America,” Oakley said. “We also know that for every dollar taxpayers invest in community college students, they see a significant return on that investment over the life of the students.”

Community college tuition can be free for students in good academic standing who qualify for state and federal grants through the federal financial aid application called FAFSA. The California Promise Program waives enrollment fees, as does a Los Angeles-specific program.

But Eaton and his fellow researchers uncovered ways in which students can get tangled in financial aid bureaucracy. Some colleges allow students to enroll in classes before their financial aid has been approved and disbursed, they found. If they fill out the paperwork incorrectly, they can receive less money than expected and can’t bridge the gap.

Or, when students withdraw part way through the semester, schools must return their federal financial aid to the Department of Education and the students must repay their school, even if they only attended classes for a few weeks. The Department of Education currently offers waivers for this process, if a college can prove that a student dropped out for a pandemic-related reason, but available data show that many students haven’t gotten relief.

Related: Federal relief money boosted community colleges, but now it’s going away

Some 2,100 students in the Los Angeles Community College District who withdrew between fall 2019 and summer 2021 owed federal aid reimbursement money to their school, according to data from district officials. In total, students owe the district $10 million for all debts.

Compton College decided to clear 2,702 students’ debt during the pandemic, to keep them enrolled, said President Keith Curry.

The median debt forgiven was just $41.

“If you owe $41 and you’re not coming back to school because you owe $41, that’s problematic,” Curry said.

The problem of these institutional debts is particularly high at community colleges, but extends to four-year campuses, as well. The UC researchers estimate that 44,000 students from the University of California and California State University systems have accrued $78 million in debt since the start of the pandemic.

When Daisy Lopez began at UC Riverside in the fall of 2020, she and her family had just been evicted and were homeless.

Lopez, a first-generation college student, had on-campus housing, but spent a lot of time shuttling back and forth between Riverside and L.A., she said, because her family was having to move from motel to motel. She struggled with online learning and began to face severe health issues. She was hospitalized several times and missed classes. Her GPA dropped and she lost her financial aid. When she tried to register in the fall of 2021, it turned out there was a hold on her account for $5,654 – in unpaid housing costs.

The report said that at one UC campus, which it did not name, the share of undergraduates withdrawing with debt doubled from 2019-2020 to 2020-2021 and the amount of debt owed tripled. Additional information obtained by The Hechinger Report show similar pandemic-era growth in student debt at several other UC, CSU and community college campuses.

“If you owe $41 and you’re not coming back to school because you owe $41, that’s problematic.”

Keith Curry, president, Compton College

At Diablo Valley College, in Contra Costa County, for instance, the number of students with outstanding balances grew by 50 percent between 2019-20 and 2020-21, from fewer than 4,700 to more than 7,000. The median debt climbed from $21 to $138 in that time.

California has been at the forefront of policies to ease student debt burdens. In 2019, it became the first state in the nation to ban transcript withholding for unpaid balances – a policy passed or under consideration in at least nine states and advocated for by Secretary of Education Miguel Cardona. But the policy is of little help for students who want to continue their education at the school where they began or who cannot come up with the money to avoid being sent to a debt collector.

California’s public colleges and universities have wide discretion in how to handle student debt collection, and practices vary. Some try on their own to collect the debt. by contacting students. Others use private debt collection agencies. Some forward the debt to the state Franchise Tax Board to garnish tax refunds.

Related: Colleges are withholding transcripts and degrees from millions over unpaid bills

Although some schools paused the use of debt collectors during the pandemic, that practice can have “lasting effects on your ability to rent an apartment, to get a car loan, to get a credit card and to fully participate in the economy,” Eaton said.

Meanwhile, the Chancellor’s Office has continued running its tax-offset program. Participating schools send the office names of students with past due balances and the information is sent to the state Franchise Tax Board. Students can then have their state tax refund and any lottery winning garnished. According to the Chancellor’s Office, 21 districts, involving about 96,000 students currently participate in the program. Seven others are in the approval process.

Officials at Rio Hondo Community College in Whittier decided to pause participation in the tax-offset program for current students before the start of the pandemic and will not restart for at least three more years, said Stephen Kibui, vice president of finance and business. The campus typically gets back about 40 percent of what it’s owed after allowing for a 25 percent administrative fee, he said.

The college also previously worked with a debt collector, but scrapped that when the 33 percent fee was too high and students’ credit was being damaged.

For now, Rio Hondo is using federal relief money to waive current student debt, which Kibui says benefits both students and the college. The campus has lost more than 8,000 students since 2018-2019, with enrollment dropping from 33,500 to 25,000.

“The college is in dire need of students,” Kibui said. “We are not adding any financial hardships to any of our students.”

Several other community colleges and universities across the state have used their federal relief funds to forgive student debt, in hopes that students will stay enrolled or dropouts will return.

Long Beach City College, for example, has forgiven $2.1 million in debt for 7,990 students from spring 2020 to summer 2021, according to the interim executive vice president of student service, Dr. Nohel Corral. Individual debts forgiven ranged from $100 to $5,000.

The decision meant thousands were able to continue with their education. Endele Wilson was one.

For him, the timing was critical. If his debt were not forgiven, “I would have had to stop school,” he said. “It’s my hypothesis that if people stop for two semesters it’s not as easy to get started again – I could have easily been fully sidetracked.”

The UC researchers’ report recommends that the state should require – and financially support – all colleges and universities to forgive these debts, arguing that it could have an enormous impact. When Lake Tahoe Community College District canceled pandemic debts for 457 students last year, it found that 152 of them immediately re-enrolled to resume their studies.

“If Lake Tahoe’s success was replicated statewide, tens of thousands of students would be re-enrolled,” the report concludes.

Some advocates say that schools should use this moment to rethink how they handle student debts, as federal relief money is about to dry up.

“See if you can come up with a more mutually beneficial solution than just saying, ‘This is a public debt, I’m sending it to collections,’” Jessica Thompson, vice president at The Institute for College Access and Success said. “Nobody wins and the person whose name the debt is in gets into a spiral that has repercussions that benefit nobody.”

She pointed to Detroit’s Wayne State University, which has seen success with its program that allows students with debts to re-enroll and forgives those balances after they complete a semester. Such a program benefits colleges as well, by helping them boost enrollment and, ultimately, bring in more money from the former dropouts.

“It turns into a self-sustaining way of dealing with this debt,” Thompson said.

Dr. Curry, who led the effort to forgive debts to Compton College, worries that the program cannot continue without pandemic-related funds.

“We never had the opportunity to pay off students’ debt” before the pandemic, said Dr. Curry.  “The question will be, can you sustain it? And also, what policy changes will you have over the next two or three years to ensure that this doesn’t happen to other people?”

For now, forgiveness has brought back many students who see completing college as one of their few options to advance.

Lopez, the UC Riverside student, had her debt lifted through federal funding. Her mom is dealing with homelessness and her own health isn’t perfect, but she is managing.

“I was struggling, honestly, and without it, if I still had the debt, I wouldn’t be in school,” she said. “I need college. Without it I would feel like I have nothing left for me, and no option to build for the life that I want.”

This story about college fees was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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On February 1, 2022, barring one last extension, nearly 43 million people with federal student loans will have to start making payments on them again, following a pause during the Covid pandemic. As the deadline looms, advocates are raising alarms that the loan system is not ready for the pressure.

“I think the servicers are going to be overwhelmed,” said Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a nonprofit that advises and advocates for student borrowers. “Forty-three million people all reenter repayment at the same time. You can’t staff for that.”

She and other advocates fear confusion and worse — checks being sent to wrong addresses, people having to re-enter information, borrowers not even knowing that their loans are due again and thereby risking missing payments — leading to disruptions and mistakes that could carry long-term consequences.

On February 1, 2022, almost 43 million borrowers — accounting for nearly all of the $1.6 trillion in U.S. student loan debt — must resume making payments

The return to repayment, as officials have termed it, ends the pause on payments created by the CARES Act. Students’ federal debts were essentially frozen, with no interest accruing. Now, although the Department of Education is doing behind-the-scenes work to get ready for the transition to requiring payments again, little has been revealed publicly. Some advocates worry that the unclear planning around what is expected of servicers is a sign that borrowers will have a hard time getting the help they need to stay on top of loan repayments or fix servicer errors.

“There isn’t clarity around nuts and bolts things,” said Kyra Taylor, an attorney with the National Consumer Law Center who focuses on student loans. “Like when folks should recertify their [income-driven repayment] plan, what will happen if they fail to make payments because their contact information was wrong or what borrowers should do when servicers make mistakes after their accounts are transitioned.”

On November 29, Richard Cordray, the chief operating officer of the Federal Student Aid arm of the Department of Education, spoke at a conference for financial aid professionals. “We will focus on supporting borrowers and their families with clear communications and with an emphasis on execution by our loan servicers,” said Cordray. But while he outlined plans to monitor wait times and other metrics for servicers, he did not address the more complicated issues borrowers may face as loan payments are once again required.

“I think the servicers are going to be overwhelmed. Forty-three million people all reenter repayment at the same time. You can’t staff for that.” 

Betsy Mayotte, president and founder of The Institute of Student Loan Advisors

Part of student advocates’ anxiety stems from a game of musical chairs being played by the major loan servicers. FedLoan and Navient, which manage more than 14 million borrowers combined, are phasing out their student loan portfolios. While these firms have contracts with the Department of Education until 2022 and 2023, respectively, the transition of borrowers has already begun. Borrowers have reported receiving letters stating that their loans will be transferred to another servicer — in some cases, from FedLoan to Navient. A smaller servicer, Granite State Management & Resources, announced that it will not renew its government contract and will transfer its 1.3 million borrowers as well.

All these borrowers are being added to the rolls of other servicers just as issues are expected to arise for the borrowers they currently have enrolled.

“When accounts are transferred from one servicer to another, problems result,” said William Lund, Maine’s student loan ombudsman and superintendent of the state’s Bureau of Consumer Credit Protection, over email. “Checks are mailed to old addresses, bank account auto-deduction authorizations need to be changed, deals or concessions made by a prior servicer are not honored by the new servicer.”

“As with other servicers, we have a common communications playbook that was provided to us by FSA,” the Federal Student Aid office, said a spokesperson for PHEAA, the Pennsylvania agency that controls FedLoan. A Hechinger Report request to see those guidelines was still being processed, a representative for the Department of Education said.

Navient did not respond to requests for how it plans to handle increased caseloads while it transfers borrowers to other servicers. EdFinancial and Nelnet, two companies receiving student loan cases from other servicers, also did not respond to requests for comment.

“There isn’t clarity around nuts and bolts things.”

Kyra Taylor, attorney with the National Consumer Law Center

There is even the chance that, come February, many borrowers might fail to realize the restart deadline has passed. While the Department of Education has sent emails warning of the looming restart, most borrowers heard of the deadline from their servicers, according to a Student Debt Crisis Center survey of its online followers. A small percentage had not heard about the restart at all. These borrowers will likely see the first signs of trouble with delinquency notices mailed to them after missed payments, but only if they have kept their mailing addresses current throughout the pandemic.

Mayotte and The Institute of Student Loan Advisors plan to roll out social media campaigns to nudge borrowers about the end of the pause, starting with reminders to confirm their contact information with their servicers. That would ensure that “as [servicers] start sending out their communications, the borrowers are getting them,” said Mayotte.

Advocates are bracing for an increase of confused borrowers requesting outside help with their servicers after the pause ends. “We are doing everything we can to prepare ourselves for that increase in borrower demand,” said Lund. His office participates in several interstate and interagency information groups, including a discussion group with student loan advocates from eight other states and Washington, D.C. Scott Kemp, Virginia’s student loan advocate, says his office is promoting a new website ahead of the restart.

Related: PROOF POINTS: Is forgiving college debt the best way to solve the student loan crisis?

The lack of clear guidance for borrowers mirrors President Joe Biden’s silence in recent months on universal student loan cancellation. Despite prominent Democrats’ backing of plans for loan forgiveness, it is unclear how open the administration remains to the idea.

“The time to cancel the debt is now,” said Taylor. “It would reduce the number of folks who are in the federal student loan portfolio and the number of folks who are going to be transferring from one servicer to another.”

The administration has authorized more than $10 billion in cancellations through approved borrower-defense-to-repayment claims, total and permanent disability discharges, and the waiving of certain requirements for the public service loan forgiveness program. But those cancellations cover less than 1 percent of total student loan debt. The waivers also leave other issues with public service loan forgiveness unresolved. For example, certain borrowers, such as social workers, do not currently qualify unless their direct employer is a nonprofit, according to Sarah Butts, director of public policy at the National Association of Social Workers.

“Even just cancellation at $10,000 would help a lot of social workers,” said Butts. “These are the individuals that were on the frontline during the pandemic.”

Related: Interactive: Explore who gains most from canceling student debt

It remains to be seen whether the deadline will bring only momentary chaos or mark the start of an ugly chapter for the borrowers, who hold nearly $1.6 trillion in student loan debt. The pause did little to change the high percentage of federal student loan borrowers in default — according to the College Board, 17 percent of borrowers as of 2021. The number was 18 percent in 2019. Defaults cause the whole amount of a loan to be considered due — in the case of federal student loans this can lead to wages or Social Security payments being garnished — and negatively impact a borrower’s credit history, making it harder to obtain other types of loans, such as a mortgage, in the future.

The pool of defaulted borrowers risks growing after the pause. The percentage of student loan debt that became seriously delinquent — the last step on the path to default — was just 1 percent in the third quarter of 2021, according to data from the New York Federal Reserve, likely all of it private loan debt. That rate is a sharp dip from pre-pandemic years, and will inevitably increase as interest rates rise from zero and repayments are required.

“In the beginning [the restart] will mean a lot of long wait times for paperwork and phone [support] that will eventually even out,” said Mayotte. “But I think we’re going to be watching this and seeing the implications of it over the next five years or more. I think we’ll see it reflected in default rates three or four years from now. I hope I’m wrong.”

This story about student loan repayment was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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In July the Board of Regents at the University of Wisconsin convened to finalize the budget for the 2021-22 academic year. The Covid-19 pandemic had walloped the system, leading to a net loss of nearly $170 million as of spring 2021. Weeks before, a new state budget had freed the regents to let tuition rise for the first time in nearly a decade. State experts thought the system risked falling further behind. The time seemed to be right for a tuition hike.

“It’s a bit of a perfect storm for these institutions,” said Jason Stein, research director of the Wisconsin Policy Forum. “They have state funding that has not kept up with inflation, they have a tuition freeze that has been going for eight years. They have enrollment loss, and then they have Covid-19.”

Instead, the regents approved a budget that left tuition at 2013 levels.

Amid a broken year, colleges have faced pressure to reduce tuition, and dozens, like Wisconsin’s, even extended tuition freezes into the fall of 2021 These include Georgia’s and New York’s state systems, along with a handful of private colleges such as Texas Christian University and Butler University.

But these freezes are misleading, as the actual costs of college can actually increase for some students who may rely on financial aid to attend. Historically, freezing tuition offers marginal relief to low-income families while giving the greatest benefits to full-paying families from more affluent backgrounds, according to analysis by The Hechinger Report, which has been monitoring college prices across different sectors of higher education in its Tuition Tracker project.

“[Lowering] the sticker price is only useful if you’re wealthy enough to be paying it, and most students are not.” 

Phillip Levine, professor of economics, Wellesley College, and founder of MyinTuition, a net-price calculator

Student groups often pushed for tuition freezes, even before the pandemic, as a way to keep college affordable, but the benefits tend to go to those who pay the full “sticker price,” or close to it. Among public universities, 41 schools with available data kept their published tuition from rising more than 5 percent from 2010 and 2018. For students from families making $48,000 per year or less, the net price rose roughly the same amount at those schools as at schools that raised tuition by larger amounts.

A change to “the sticker price is only useful to if you’re wealthy enough to be paying it, and most students are not,” said Phillip Levine, professor of economics at Wellesley College and the founder of MyinTuition, a net-price calculator that compares actual costs across dozens of institutions.

Related: Tuition Tracker: Interactive search tool

Increasingly since the 1970s, college educations have been priced more like hotel rooms or airline tickets, with a different cost for almost every student. Discounts help attract the wealthier, full-paying students while financial aid lowers the cost for others; colleges aim to get the most money from each person, based on their ability or desire to pay.

Within the University of Wisconsin system, net price has in fact risen for many low-income students over the last decade. Only at UW-Madison and the small campus of Parkside in Kenosha have costs dropped for students from families making $48,000 or less. (Part of the drop in Madison may be due to a scholarship launched in 2018 covering tuition and fees for low-income students.)

At private colleges, sticker-price increases actually correlate with lower net prices for the least wealthy students. For low-income students attending colleges where tuition did not increase more than 5 percent, net price has stayed flat since 2010. For those attending colleges where sticker price went up more, net price fell 18 percent. The University of Chicago, which we calculated in 2019 was on the path to being the first school to break six-figure tuition, again hiked its price in 2021-22 after having kept tuition frozen the year before. Despite these increases, low- and middle-income students at Chicago have on average paid less than a tenth of the more-than-$75,000 price tag.

Related: University of Chicago projected to be the first U.S. university to cost $100,000 a year

Schools putting revenue from tuition increases toward financial aid have a “better ability to target assistance to the people who are most in need,” said Stein. “The tuition freeze is simple to do. It’s simple to explain to the public. But it is not targeted.”

Beyond the costs to students, an institution with a long-term tuition freeze has less budgetary flexibility if the state does not compensate for the reduced tuition revenue. Since 2014, a year into the tuition freeze, the University of Wisconsin has seen its faculty ranks shrink, according to a report from the Wisconsin Policy Forum. UW-Madison has also had the fourth-slowest increase in research and development investment among the top 30 research universities in the U.S. between 2010 and 2018.

The wish to avoid constraints on budget and recruitment may explain why some universities have already thawed — or never agreed to freeze in the first place. Minnesota State University raised tuition this year by 3.4 percent across the board, as a state appropriations bump, budget cuts and other moves were not sufficient to cover a deficit for the system, where tuition and fees account for nearly 40 percent of annual revenues. The University of Michigan, Ann Arbor, also increased tuition, but said it will meet 100 percent of need for in-state students. The average costs for students studying on campus at Ann Arbor were lower in 2018-19 than in 2010-11 for families making $75,000 or less per year, according to federal data.

“It’s a bit of a perfect storm for these institutions. They have state funding that has not kept up with inflation, they have a tuition freeze that has been going for eight years. They have enrollment loss, and then they have Covid-19.”

Jason Stein, research director of the Wisconsin Policy Forum

Tuition discounting is not without pitfalls for students. Research has shown that high listed tuitions alone may be enough to stop low-income students from even considering a college, even if financial aid covers most of the cost.

“Institutions lose students because they think it’s too expensive,” said Levine, who believes that some universities want to address that shortcoming. “There are high-level institutions that are underrepresented with lower socioeconomic-status students and are working very hard to improve that. You can’t do that if people think you charge $75,000 or $80,000 a year and can’t get through the barrier of costs.”

It will take some years to understand whether tuition discounting will continue helping low-income students or merely help colleges to hit enrollment targets following the pandemic. Enrollment estimates showed a steep decline in undergraduates in 2020-21, leaving schools fighting hard to enroll students from a smaller pool of applicants. With the number of students completing the FAFSA this fall lagging even last year’s numbers, according to Data Insight Partners, some schools may lean heavily on aid to woo students who otherwise might have paid more.

“Stanford, Duke, Williams, these types of schools, there were no changes. Those guys could survive a pandemic, every year, for a couple of centuries,” said financial aid consultant Matthew Carpenter. “It was these other private schools, of which there are many, that really tended to, right out of the gate, give more money than they typically do. Or, in many cases, come back with bigger offers after the fact. Sometimes without families even going back to negotiate.”

This story about college tuition freezes was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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President Joe Biden, congressional leaders and debt experts continue to argue over student loan debt forgiveness — both how much should be canceled and which branch can offer relief. Biden told a questioner at last week’s CNN town hall he did not think he had the authority to cancel $50,000 for student loan borrowers, and instead would limit relief to $10,000. Earlier, the administration had said it was reviewing its options for forgiveness through executive action. Even the more modest figure of $10,000 per student would represent one of the most ambitious projects under the new administration, erasing an estimated $377 billion in debt.

Student debt forgiveness is popular among voters, but a handful of economists have questioned whether it helps those most in need. They argue that middle-class families will benefit more than poor and marginalized Americans.

There are many ways to look at the types of people loan forgiveness would benefit: Should we consider household income? What about net wealth? How would borrowers of different races be affected? A Hechinger analysis of federal data provides additional dimensions to the picture of student debt. We show more detail about where student debt falls most heavily and how different cancellation plans would affect different groups of Americans.

First, here is the overall picture of student loan debt and its rapid growth.

Americans amassed trillions of dollars in student loan debt in the course of just a few decades. Throughout most of the Department of Education’s life as a guarantor of loans and a direct lender, student borrowing remained below $20 billion per year, according to a 1998 report from the Institute for Higher Education Policy. That shifted with the 1992 reauthorization of the Higher Education Act. Among several changes, it created an unsubsidized lending program that offered less attractive terms than subsidized loans, but was open to students from all income levels. Borrowing lurched above $30 billion by the 1996-97 academic year.

Related: PROOF POINTS: Is forgiving college debt the best way to solve the student loan crisis?

As of November, total outstanding student loan debt was $1.55 trillion, according to the Federal Reserve Bank of New York. New lending remains around $100 billion per year, the biggest share of which is unsubsidized Stafford loans, according to College Board data.

The 1998 report also revealed that middle- and upper-class households drove most of the increase in undergraduate borrowing. The somewhat counterintuitive fact that affluent folks make up a large portion of borrowers — considering that they seem best positioned to attend college without loans — is what worries some economists about forgiveness programs.

Adam Looney of the University of Utah wrote that $50,000 forgiveness plans like that of Sens. Chuck Schumer and Elizabeth Warren would give unnecessary relief to “borrowers with the ability to repay,” while Sandy Baum of the Urban Institute called universal cancellation “not a progressive policy” since the relief would go only to those that attended college and leave out many low-income households.

It is true that broad cancellation would forgive more dollars of debt for middle- and high-income families. (In general, higher-income households borrow more than lower-income households across almost every category of credit, according to data from the Federal Reserve.) But this obscures the fact that it is households with the least wealth, not affluent families, that borrow most frequently and at the highest balances. The Federal Reserve tracks households by percentiles based on their net assets, a calculation of wealth that balances assets such as home values against liabilities such as student debt. Households in the bottom quarter of net assets are accumulating student loan debt faster than any other group. The median student loan debt of these households has rocketed above $30,000.

Even if these borrowers go on from college to middle-class jobs, they can still be burdened by debt. “There are some folks who have what is considered a high income who have no wealth to show for it,” said Ashley Harrington, federal advocacy director for the Center for Responsible Lending, which supports a $50,000 student loan forgiveness plan. “They actually are unable to build wealth because of student debt and because of systemic inequities.”

This is especially true among Black borrowers, who are overrepresented among debt-holding U.S. households and who face barriers to building wealth in other areas, such as discrimination in the housing market.

Calculating where dollar amounts of relief would accrue also glosses over the fact that debt is more costly — even ruinous — lower down the income scale. For instance, researchers have found that late payments and delinquencies spike around the $2,000 level in loan balances, likely because many of these borrowers began but did not complete a degree program. Bad marks in a credit report, even for small balances, add more to the cost of other types of credit over an individual’s lifetime, according to Harrington, making the financial impact much larger than the dollar value of the original loan.

Defaults also affect some households more than others. Research by Judith Scott-Clayton of Teachers College, Columbia University found that nearly half of Black borrowers that enrolled in college in the 2003-04 academic year had defaulted within 12 years. (The Hechinger Report is an independent news organization located at Teachers College.)

Some economists propose that instead of issuing widespread student loan debt forgiveness, the government should strengthen existing income-driven repayment plans, which forgive the balance of the debt after a period of up to 25 years. However, some borrowers have difficulty navigating the process of enrolling — if they are aware of these programs at all. Many participants also see their balances balloon at the beginning, when their incomes are low.

The Congressional Budget Office estimates that, for those taking out college loans in the 2020s, 21 percent of undergraduate and 56 percent of graduate student loan debt will eventually be erased through forgiveness. But until that point, the debt will remain on their credit scores.

Related: Do income-based repayment plans drive young borrowers of color deeper into debt?

“Even people in good standing are getting hammered,” said A. Wayne Johnson, a former Department of Education official who served as the chief operating officer of the Office of Federal Student Aid under Education Secretary Betsy DeVos. Johnson supports a $50,000 universal forgiveness package that he says would wipe out the debt of roughly 84 percent of federal student loan borrowers. He would also like to see a policy that removes any associated negative marks from Americans’ credit histories. “Then they’d be able to rent apartments, get jobs and maybe even buy houses,” he said.

Regardless of whether debt forgiveness becomes a reality, changes to student lending, such as capping loan limits or converting some programs to grants, will be necessary to curb the growth in student debt going forward. Advocates on both sides of the cancellation debate see the need for higher education reform in general, from regulations on for-profit schools, whose graduates default at higher rates than those of public colleges, to policies intended to lower the costs of public two- and four-year schools.

“We haven’t allowed the investment to keep up with college,” said Harrington, who pointed out that Pell, the grant program designed to aid low-income college-goers, covers an ever-shrinking portion of costs. “Folks have been forced to rely on debt.”

This story about student debt forgiveness was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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Dozens of colleges and universities nationwide started 2020 already under financial stress. They’d spent the past decade grappling with declining enrollments and weakening support from state governments.

Now, with the added pressures of the coronavirus pandemic, the fabric of American higher education has become even more strained: The prospect of lower revenues has already forced some schools to slash budgets and could lead to waves of closings, experts and researchers say.

To examine how institutions were positioned to respond to such a crisis, The Hechinger Report created a Financial Fitness Tracker that put the nation’s public institutions and four-year nonprofit colleges and universities through a financial stress test, examining key metrics including enrollment, tuition revenue, public funding and endowment health.

Schools faring the worst in these areas — meaning that they are projected to dip under the 20th percentile in a particular category — are marked with warning signs in the tracker. A total of 2,662 schools were included in the analysis, and 2,264 had enough data to be evaluated in every category. All data predates the pandemic.

Our analysis of the stress test results found:

• Nationwide, more than 500 colleges and universities show warning signs in two or more metrics.
• The problems were not evenly spread among states. Combined, Ohio and Illinois have more than 10 percent of all the institutions potentially facing trouble. Ohio has 36 institutions with two or more warning signs. Illinois has 26.
• Roughly 1,360 colleges and universities have seen declines in first-year fall enrollment since 2009, including about 800 four-year institutions.
• Nearly 30 percent of all four-year schools brought in less tuition revenue per student in 2017-18 than in 2009-10. 
• About 700 public campuses received less in state and local appropriations in 2017-18 than in 2009-10, and about 190 private four-year institutions saw the size of their endowments fall relative to their costs.

Many factors can cause colleges to struggle financially, according to a review of the data and interviews with 39 college finance researchers, student advocates, state officials, school administrators and faculty members. Over the last decade, enrollment slipped as the economy grew. Demographics are working against institutions in parts of the country as the number of teens — and thus the number of high school graduates — drops.  State support still lags behind what it was before the Great Recession. Many colleges and universities have a history of mismanaging their finances, increasing spending even as enrollments fell or going deeply into debt to construct new buildings.

At worst, institutions under financial stress can fold — sometimes overnight, as government and accrediting oversight fails to prevent precipitous closures that throw students’ lives into disarray. Even in the case of orderly closings, students’ educations can be significantly disrupted — many drop out and never finish their degrees.

Related: Some colleges seek radical solutions to survive

More than 50 public and nonprofit institutions have closed or merged since 2015, and experts expect to see more closures in the coming academic year. Even if colleges manage to stay open, they may have to make deep cuts to do so, which could ultimately hurt students as well.

“Think of the revenue shocks these universities are suffering,” said Gregory Price, an economics and finance professor at the University of New Orleans, noting that if students aren’t on campuses for the coming academic year or choose not to attend at all, schools could miss out on even more. “I don’t want to sound too alarmist, but this could possibly be devastating.”

The “stress test” that informed The Hechinger Report’s Financial Fitness Tracker was developed by Robert Zemsky, a University of Pennsylvania education professor; Susan Shaman, the former director of institutional research at Penn; and Susan Campbell Baldridge, a professor and former provost at Middlebury College. Their methodology draws on a uniform set of federal data that most schools have reported steadily over the past decade and allows public and private institutions to be scored according to similar standards. (For-profit schools are not included in their methodology.)

The Hechinger Report’s Financial Fitness Tracker takes the researchers’ “stress test” and applies it to individual schools to make the scores transparent and public.   

For private colleges, the Hechinger Report tool tracked enrollment, retention, average tuition revenue per student and endowment-to-spending ratios. For public four-year colleges, the metrics were enrollment, retention, average tuition revenue per student and state funding. And for public two-year colleges, the analysis checked enrollment, state and local funding and the ratio of tuition revenue to instructional costs.

Related: Enrollment and financial crises threaten growing list of academic disciplines

The stress test is not a crystal ball to predict closures. Many colleges on the verge of collapse remain that way for years, continually finding ways to survive. Others, whose circumstances may look less dire, can close suddenly. Interpreting the nuances of any given institution’s financial situation is complicated.

Even so, experts say the metrics in the tool provide valuable insights. “They’re a really great starting point,” said Doug Webber, an associate economics professor at Temple University. Enrollment and tuition revenue, in particular, “don’t tell you everything, but they get you a lot of the way there.”

“How would the bigger world perceive the value of our degree if, basically, you gutted most of your qualified faculty?”

Chris Pines, former philosophy and humanities professor at the University of Rio Grande in Ohio

A deeper look at Ohio, which is one of the centers of the nation’s higher education financial crisis, shows how these trends interact to create different forms of financial stress at different types of institutions. In Ohio, state budget cuts and a declining population of teens have combined to create financial struggles for schools. Ohio has lagged behind the national average in restoring funding to higher education following the 2008 recession. All kinds of institutions — from large public universities to small private schools —  face challenges.

“We’re just swimming deep in the ocean right now,” said Chris Pines, a former full-time philosophy and humanities professor at the University of Rio Grande in southeastern Ohio, who recently lost his position due to the school’s financial problems. “We’re treading water and there’s no raft. I don’t know what the long-term future looks like.”

Enrollment declines lead to difficult cuts

Colleges have lost hundreds of thousands of students since 2010, when undergraduate enrollment peaked at just above 18 million. That figure declined to 16.6 million in 2018. Nearly 600 two- and four-year institutions saw their incoming fall enrollments drop more than a quarter in that time period.

“If your enrollment is cratering, then you’re probably not going to be raising tuition, because that’s just going to compound the problem,” Temple University’s Webber said. “So you’re going to be spending less.”

The University of Rio Grande, a private four-year university in the foothills of the Appalachian Mountains, has struggled with falling enrollment for years. The university, which partners with the public Rio Grande Community College, plays an important role for the surrounding counties, which include some of Ohio’s poorest residents. About half of the students at the two schools receive Pell Grants, a form of federal aid for low-income students.

“A lot of underendowed, financially fragile institutions are going to have to shut their doors, unfortunately.”

Gregory Price, an economics and finance professor at the University of New Orleans

Both institutions have recently faltered. Their combined enrollment fell from 3,264 students in 2012-13 to 2,227 in 2018-19, according to federal data. The number of high school students in Ohio has dropped in the last decade, leading to fewer high school graduates, according to state and federal data. Those who do enroll at Rio Grande’s campuses often don’t stay; annual retention rates hover just above 50 percent for full-time students and are often even lower for part-time students.

Related: With enrollment sliding, liberal arts colleges struggle to make a case for themselves

In April 2019, Rio Grande faculty secretly held a vote of no confidence in the schools’ governing boards, alleging that administrators had kept spending as if the supply of new students would keep increasing. The board’s mistakes, the faculty argued, had led to “persistent and severe budget deficits.”

Shortly after that no-confidence vote, 18 professors — about a fifth of the full-time faculty —were told they would be let go, according to Rio Grande officials. (Two were brought back full-time and two will work as part-time adjuncts.) Programs that were deemed too small were eliminated entirely, such as the school’s music program.

Pines, who was among the 18 let go and will only be teaching part-time this fall, said many faculty viewed the budget problems as a “foreseeable train wreck.”

More than 660 two- and four-year institutions saw their fall enrollments drop more than 25 percent between 2010 and 2018.

The reductions saved the school nearly $1 million, according to Ryan Smith, the university’s president, who assumed his role in October 2019, after the cuts had been made. He said he understood the frustration of faculty members, but that the downsizing had been necessary. “We kind of bottomed out as far as what we were offering before,” he said.

Pines says he can’t completely fault the prior administration for making the tough cuts, but he worries for recent and future graduates: “How would the bigger world perceive the value of our degree if, basically, you gutted most of your qualified faculty?”

Smith has restructured some of the university’s debt to fully fund pension liabilities and hired a marketing director; the administration also added more sports teams to try to attract students. Smith projects enrollment growth this fall and believes the school will ultimately be able to increase the number of programs it offers. When that happens, it’ll be a challenge to figure out “how do we grow back to where we were?” he said. “But we’ve got to be able to survive today.”

State funding cuts add to financial problems

As in most states, Ohio’s higher education system hasn’t fully recovered from the recession of a decade ago. In 2018, the state was still spending 17 percent less per student than it spent in 2008. Nationally, that figure was 13 percent less. More than half of public campuses nationwide have had state and local appropriations decrease since 2008, according to federal data.

Higher education finance experts predict more cuts ahead for public institutions as the coronavirus decimates state budgets. Some have already started. In May, Ohio Gov. Mike DeWine, a Republican, announced $110 million in higher education cuts, a nearly 4 percent budget reduction for each institution.

Eighteen Ohio institutions lost more than $1 million each. The cut for the University of Akron, for instance, was more than $3.7 million. The school had already run deficits for the last three years and, in late spring, announced that it needed to shave $65 million from its $325 million budget. In mid-July, the board of trustees voted to eliminate 97 full-time professor positions — more than 1 in 6 at the university — and 60 other staff members. (The plan still needs to be ratified by the union.)

Related: Budget cuts are taking the heaviest toll on colleges that serve the neediest students

The budget cut was based on “significant” revenue losses from the spring campus closure, enrollment projections and state funding trends, Christine Boyd, director of media relations, said in an email.

“Throughout the budget process, great care has been taken to preserve academic quality and ensure that support services — from financial aid to academic support — remain strong to help our students on their degree journey,” Boyd added.

“There is a very clear link between school spending and school resources on future outcomes. If they have fewer resources they’re spending on students, you’re going to be worse off.”

Doug Webber, an associate economics professor at Temple University

Lt. Gov. Jon Husted suggested in June to the news website Cleveland.com that there were limits to how much the state could help struggling institutions. “You can never subsidize something enough to escape the laws of economics,” he said.

Husted told The Hechinger Report that the state intended to continue supporting higher education but had to balance the budget. He added that the higher education landscape had already been changing, with students concerned about the cost of a degree and looking for other options.

“They’re facing great challenges,” he said, adding that the colleges that can adapt will succeed. “That’s just the reality.”

Pamela Schulze, a family studies professor at the University of Akron and its faculty union president, says the state has to help public colleges and universities survive, including by providing more funding.  “Of course the state can do something about it, because it’s the state university system,” Schulze said. “If they leave their university system in tatters, we really are not going to be able to fulfill our role in the state of Ohio.”

Schools with shrinking endowments scramble to raise money

State money and tuition are not schools’ only sources of funds. Many colleges and universities rely on money from their endowments, particularly to weather financial storms. Schools typically draw down a percentage of their endowments every year, trying to spend only the interest and keep the funds growing.

The larger their endowment, the less schools have to rely on other sources of revenue, and the greater financial stability they have. But about 330 schools in our tracker saw their endowments decrease over the last decade relative to their costs, according to federal data; 57 percent were private institutions.

More than half of public campuses nationwide have had state and local appropriations decrease since 2008.

Among them is Wilberforce University, a historically Black university outside of Dayton, Ohio. Its endowment dropped from $12 million in 2014 to $8.2 million in 2018.

The median endowment for historically Black colleges and universities  is half that of other colleges and universities of the same size, according to a 2018 report from the Government Accountability Office. Schools with small endowments were already in a precarious position, Price, the University of New Orleans professor, said. Now, he added, coronavirus-related revenue losses threaten to make it even harder for these schools to survive.

“It’s going to be very challenging for a place like Wilberforce to sustain itself,” Price said.

Related: Already stretched universities now face tens of billions in endowment losses

Wilberforce is currently on probation with its accreditor because of financial problems; the issues stretch back for years. In 2012, hundreds of students demanded transfer applications as a protest because “we’re not getting our quality education,” as one student put it, according to a local news report. In 2013, students held another protest, holding signs saying “Fix the dorms now” and “Broken promises,”  according to a news report.

In the spring of 2019, Wilberforce’s president, Elfred Pinkard, announced an ambitious effort to raise $2 million in about two months and $5 million by the end of the year. Wilberforce fell well short of those goals, but, buoyed by a $1.2 million anonymous gift last fall, coupled with $1.7 million in loan forgiveness, Pinkard said, they met the $5 million goal in June.

About 400 schools saw their endowments decrease over the last decade relative to their costs; nearly two-two thirds were private institutions.

Fundraising is a crucial way to boost endowments, but Price said HBCUs have historically struggled to get philanthropists’ attention, despite the important role they play in helping Black Americans achieve upward mobility. To survive, schools must find ways to persuade more donors to give.

Pinkard, who was appointed at the end of 2017, remains optimistic. In response to student concerns raised during the protests, members of the board of trustees were replaced. Officials have renovated and repaired campus buildings and started a dual-enrollment program for nearby high schoolers.

“We have been very intentional and disciplined in our attention to charting a sustainable path forward,” Pinkard said in a statement. “We join the community of institutions in higher education who are all vulnerable but determined to reimagine higher education in a post-COVID-19 environment.”

Still, with too many colleges competing for a shrinking pool of students and the consequences of the coronavirus bearing down, higher education may face tumultuous years ahead, Price warned.

“A lot of underendowed, financially fragile institutions are going to have to shut their doors, unfortunately,” he said.

This article about college financial health was produced by a partnership of NBCnews.com and  The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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This story was produced as part of the nine-part series “Are We Ready? How Schools Are Preparing – and Not Preparing – Children for Climate Change,” reported by HuffPost and The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education.

Swollen rivers swamping entire towns in Iowa. People piloting boats through deluged streets in southern Illinois. Surging floodwaters from Hurricane Dorian overtaking North Carolina’s Outer Banks.

Last year was the second wettest on record for the contiguous United States. Climate change is one factor that’s exacerbating flood risks across the country, and the damage is adding up: The 2010s saw twice as many natural disasters causing at least a billion dollars in damage as the previous decade.

As part of our reporting on climate change and America’s education system, we wanted to see how vulnerable schools are to extreme weather. We wondered: Which schools are at risk from worsening floods? In the graphic below, we use hazard maps from the Federal Emergency Management Agency, or FEMA, to allow you to search for your city or town and see if schools in your area have potential exposure to flooding.

Severe weather poses all sorts of challenges for educators and students. It can force schools to shut temporarily and keep kids at home (which, as we’re seeing now with coronavirus-related closures, is very disruptive to learning). It can cause infrastructure damage, which has been happening in coastal Louisiana. There, job losses, coastal erosion and floods caused people to move away, leading to diminishing school enrollment and, in some cases, permanent school closures. Those population changes, sometimes called “climate migration,” starve some schools of resources and lead to overcrowding in others.

When kids return to school after severe flooding, they sometimes struggle with lingering stress and trauma. Because many schools are local hubs, offering meals, counseling and other services beyond academics, damage to them can have a disproportionate impact on their communities. And flooding can lead to health problems, by causing mold that contributes to respiratory issues as well as unearthing toxic chemicals.

“Floodwaters can bring a whole host of issues,” said Perry Sheffield, an assistant professor at the Icahn School of Medicine at Mount Sinai and lead author of a study on the environmental hazards of climate change and schools.

No region of the United States is immune, but this isn’t a problem that hits everyone equally. Schools in low-income communities may be disproportionately affected, since they are more likely to be in low-lying areas and have limited access to adaptive technology, said Joseph Kane, an associate fellow at the Brookings Institution. 

Public awareness of flood risks tends to be low, Sheffield said, which can dampen emergency preparedness efforts. If you find that your school is located within or near FEMA’s 100-year flood zone, contact your school district to ask what it is doing to prepare for potential flooding.

The flood map visualization was produced by Pete D’Amato

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Earlier this month, California State University, Fullerton, asked its faculty to prepare for teaching all their fall classes online. It was one of the first major institutions of higher education to say that courses could be virtual to start the semester, depending on updates from health officials about in-person classes.  If it does go that way, CSU-Fullerton would benefit from the fact that it already offers a significant amount of online coursework. Even before the crisis, 35 percent of students took one or more classes online. And the California State University system as a whole is one of the biggest remote educators in the country; more than 150,000 students took online courses there in the 2018-19 academic year.

The coronavirus-induced shift of learning off campus was dramatic, but it accelerated a trend that has been growing over the past several years. From 2012, the earliest year data is available on distance learning, to 2018, the number of institutions where the majority of students took at least some coursework online has doubled, to more than 800, according to the National Center for Education Statistics. The growth was fastest at the public four-year colleges, which went from 77 schools with a majority of undergraduates taking at least one course online to 160 schools — roughly 20 percent of public universities — from 2012 to 2018.

A history with online education made this spring’s transition easier for some schools. Indiana’s Ivy Tech community college, for example, already had half of its nearly 70,000 undergraduates taking some courses online. When it went completely online after spring break, about 80 percent of students and instructors in face-to-face classes transitioned to an existing online class or began using content developed by system-wide curriculum groups, said the provost, Kara Monroe.

“All of those tools are already in our toolbox,” Dr. Monroe said.

But many faculty members at traditional colleges struggled, not only with the technology required, but with the challenge of adapting classroom lessons to a digital medium. The University of Maryland’s online college, Global Campus, already operates over 90 percent of its classes remotely. Its instructors received pleas for help from friends at traditional schools, asking about the basics of teaching over the internet, according to Bob Ludwig, the school’s head of media relations.

From 2012 to 2018, the number of public four-year colleges, with a majority of undergraduates taking at least one course online rose from 77 schools to 160 schools — roughly 20 percent of public universities.

“‘How do I communicate my personality?’” Ludwig said some of them were asking. “‘When I speak to my students, I am a gregarious person. When I write, I write formally.’”

Related: Will this semester forever alter college? No, but some virtual tools will stick around

On the other end of the digital divide are more than 1,000 colleges where 95 percent of students or more do no online coursework. While this number includes performing arts schools and religious institutions such as yeshivas, it also features Ivy League institutions and other costly private colleges that have had the luxury to remain mostly offline.

Boston University, a private institution of more than 18,000 students who nearly all take courses in person, sparked confusion with the rollout of its 2020-21 contingency plans. After some outlets interpreted the plans to mean the university would not reopen at all in 2020 if residential instruction were canceled, the school had to clarify that courses would continue to be taught remotely — a difficult transition for a school that taught less than 2 percent of undergraduates via online classes in 2018-19.

Early data points to schools like these taking the worst hits if colleges cannot return to in-person classes. A survey of parents of current undergraduates by the consulting firm Tyton Partners found 90 percent of them would not be comfortable with their child returning under the current circumstances of higher education. While 22 percent were uncomfortable with any online coursework, 44 percent said they would be comfortable with their child attending in those circumstances if it were at a substantially reduced price.

This story about online college enrollment was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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CHICAGO — Butterflies congregated on a bush as Griffin Badalamente walked past the carefully cultivated lawns and flowers on the University of Chicago campus. In addition to its reputation as an international powerhouse in the field of economics and a home to multiple Nobel Laureates, the school has grounds that are designated as an official botanic garden.

The privilege of attending is costly, at $57,642 for the 2019-20 academic year. It’s already one of the most expensive colleges in the country. But in less than a decade, by 2025, students like Badalamente could expect to pay more than $100,000 per year, based on projections by The Hechinger Report using annual college cost growth rates from 2008 to 2018. That would likely make the University of Chicago the first college or university in the United States to break the six-figure mark. Three other schools — Harvey Mudd College in California, Columbia University in New York and Southern Methodist University in Texas — are projected to cost almost as much.

“That’s not surprising,” Badalamente said, laughing. The third-year student is studying computational neuroscience and receives a small National Merit scholarship, but otherwise his family pays the full price of attendance. “My parents make enough money luckily for me to pay the full tuition,” Badalamente said. Paying more than $100,000 for tuition, fees, books, room and board and other expenses is “more money than it should cost, but I guess if it’s subsidizing people who wouldn’t have that opportunity, I feel a little bit better about it.”

While need-based aid has existed in the U.S. for nearly as long as there have been universities, in the past, most of those grants came from existing pots of money held by the universities, such as endowment income, or were tied to gifts from individual donors. Kalamazoo College is one of the schools where the practice of tuition discounting began, back in the 1980s. David Breneman was president of the small liberal arts school.

“At that time, on the ledger on the revenue side, if a school had a thousand students enrolled they treated that as if they had a thousand full-pay students,” said Breneman. “Then on the expense side, they had a category for financial aid.”

The amount of financial aid would be drawn up when the budgets were set before the beginning of the academic year. But by the next spring, Breneman said, his admissions office would inevitably find a few dozen students at risk of transferring or dropping out over financial concerns. The U.S. was going through a demographic shift similar to the one worrying small colleges today, as the declining birth rate in the 1960s meant that there were fewer 18-year-olds in the 1980s. Lowered demand made filling seats harder. An economist by training, Breneman calculated that if a couple thousand dollars in financial aid could secure nearly $9,000 in tuition by enrolling a new student or retaining one at risk of leaving, it made financial sense. He found the money.

“Then my business officer, when the books were closed, would beat me up for breaking the financial aid budget,” he said. “And I would apologize and say, ‘Oh my god, I’ll never do it again.’ And of course we did it again every year.”

Related: New data show some colleges are definitively unaffordable for many

Though Breneman was working independently at Kalamazoo, similar schemes were being informally implemented at other private nonprofit colleges. Breneman would go on to write a book entitled “Liberal Arts Colleges: Thriving, Surviving, or Endangered?” that laid out a model for how colleges could think of these unfunded grants strategically and economically. “If there was any point to do what I did in my book it was to argue that, for these small colleges — well, any college with a shortage of students relative to the demand they want to fill — you’re just discounting,” Breneman said. “Don’t kid yourself that you’re doing anything else.”

Tuition discounting spread through higher education as a way to entice students who might otherwise be reluctant to pay full price. But to be able to afford giving out those deals, colleges and universities had to raise tuition. The complex math behind their soaring prices did not just ruffle the feathers of college financial officers. President George H. W. Bush’s Department of Justice began an antitrust probe of dozens of colleges in 1989 that compared tuition discounting strategies to anticompetitive price-fixing. Then, in 1997, Congress established a National Commission on the Cost of Higher Education to investigate the reasons for increasingly high tuitions.

The amount of institutional aid, according to the commission, had increased 178 percent between 1987 and 1996. The commission took a look at six possible reasons for college tuition inflation, including the increasing availability of federal student loans, and found that “there is slightly stronger evidence that increases in institutional aid have been one of the cost and price drivers” of tuition. “[I]t seems reasonable to conclude that tuitions could have increased slightly less had institutions not been putting these revenues into institutional aid.”

The ongoing spread of discounting has been aided by new technology. In the past, figuring out which students were “locks” — certain to enroll regardless of price — and which needed a sweetener in the form of aid, required scraps of data and some judgment. In his book, Breneman wrote of a clever method that one school used to determine a student’s commitment to attending the school — and thus how much or how little aid was necessary — in which the school sent prospective students postcards asking them to rank their top choices for college. If the institution was lower in the rankings, that meant it would need to deliver more aid, or give up on this student altogether. Software now uses the data schools have on applicants to help predict how much aid must be distributed in order to achieve enrollment targets.

“There are some pretty sophisticated algorithms that — based on the financial information, academics, how much interest you’ve shown in the college — will give you a pretty good idea of what someone is willing to pay,” said economist Robert Kelchen, author of “Higher Education Accountability.” “Are you emailing them? Are you visiting them? Colleges are trying to get a sense of, OK, if you’re really interested they may need to offer you less money.”

When demand is high enough that families who can afford it will pay virtually any price, discounting schemes can reduce tuition costs for other students to rock-bottom prices even as the school’s revenue remains robust. That is true for the University of Chicago, which first-year student Ella Cornwell from California chose over less-pricey University of California schools. “I’m an only child, my mom’s an only child, so her parents have had a college fund for me since the day I was born,” said Cornwell, who nonetheless received some aid based on her parents’ income.

Roughly 37 percent of Chicago undergraduates pay the full price by enrolling without some form of institutional grants, federal aid like Pell Grants or outside scholarships that cover all or part of tuition and expenses, according to federal data. But incoming freshmen from families earning less than $75,000 per year paid an average of less than $5,000 in total costs for the 2016-17 academic year. For families making between $75,001 and $110,000, average total expenses were $15,458. For the wealthiest families, those making over $110,000, the average total cost was roughly $40,000.

“The University of Chicago is one of the few universities that provides truly comprehensive financial support,” a spokesperson for the university said. “UChicago admits U.S. students without regard to their financial need, meets the full financial need of all students who are admitted, and does not expect students to take out any loans. We have eliminated student loans from need-based financial aid packages, which has dramatically reduced student debt upon graduation.”*

The university is certainly spending the money it’s brought in. It dedicated a new $81 million library — with less than a third of its cost funded by the building’s namesake donors — in 2011, adding its gleaming, postmodern-domed reading room to the campus’ Gothic and Brutalist edifices. It added a new 800-student residence hall and dining commons, to house students for the two years they are required to live on campus. It also manages a staff that receives more than $1 billion in salary, $230 million of which is for its roughly 1,350 instructional staff and faculty, according to federal data for 2017-18. Producing and employing Nobel laureates does not come cheap.

For less-elite schools, discounting can still bring some benefits, according to the paper from Behaunek and Gansemer-Topf. The average net tuition revenue per student at the small private colleges in their study grew by about 1.26 percent per year after adjusting for the increase in costs of instruction. That growth, along with concerns about signaling weakness to prospective students or losing control over enrollments, has kept many schools from scaling back discounting and lowering tuition prices. For Gansemer-Topf, the question is less about whether to use discounting, and more about thinking critically about its effectiveness.

“Institutions can’t just increase tuition because ‘We have to look good, we have to stay competitive,’ ” said Gansemer-Topf. “Are those assumptions current?”

*Editor’s note: University of Chicago officials provided this statement after the story was published; they declined to comment when contacted while the story was being reported.

This story about college tuition inflation was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

The Hechinger Report calculated future sticker prices for four-year institutions by using data on compound annual growth rates in total cost of attendance from 2008 to 2018, obtained from the National Center for Education Statistics, and projecting those numbers to the academic year beginning in fall 2025. The University of Chicago is projected to reach $103,248 by 2025 based on previous growth rates and its current tuition. Three other schools had a projected sticker price of $100,000 or more. Harvey Mudd College in California is projected to reach $102,508, while Columbia University in New York and Southern Methodist University in Texas are projected to reach roughly $100,000. (The Hechinger Report is based at, but editorially independent from, Teachers College at Columbia University.)

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Expenses have been rising for college students across the board — costs for tuition, fees, campus housing, even dining are growing faster than inflation.  Only one expense — off-campus housing — is outside the control of colleges and universities, and the data suggest that cost problem is growing worse over time, adding to already-soaring student debt loads.

Between 2000 and 2017, room and board costs for students living off campus rose 24 percent at public four-year universities after inflation, according to data from the National Center for Education Statistics analyzed by The Hechinger Report.

The increase may be one factor leaving a high percentage of college students “rent-burdened,” defined as paying more than 30 percent of household income toward rent. Fifty-nine percent of homes with an undergraduate or graduate student as the head of the household met that definition in 2017, according to research from the Joint Center for Housing Studies at Harvard University, a much higher figure than for households not headed by a student. (One caveat: students, especially those taking classes full time, typically use parental support, loans or savings to pay rent, instead of income.)

“That’s really high,” said Alexander Hermann, a research analyst at the Joint Center for Housing Studies, who wrote the rent-burden study. The increase in living costs and the high rate of rent-burdened households both fit into a national pattern of rising rents, which are being pushed up by unmet demand.

“We’ve been underbuilt nationally for most of the past decade,” said Hermann. “We’re just not building enough new housing to accommodate demand.”

Some data suggest that the trend may be more acute in areas around universities. In zip codes with at least one four-year college, the five-year median rent rose 5.8 percent for the period ending 2017 compared to the period ending 2015, according to Census data. The increase was just 4.5 percent in areas without a four-year institution.

Demand can be especially strong in areas around colleges because campuses draw more people than just the students and faculty, according to Hermann. Businesses spring up in the area in order to hire college-educated talent and then need to house their employees. In addition, people not otherwise affiliated with schools can view proximity to a university as a plus, as the campus offers amenities such as green space or venues for cultural events.

Related: Fast-rising room and board costs worsen college affordability problem

If development of new housing supply lags behind demand, “rents go up considerably,” said Hermann. “You might limit who can live there in significant ways.”

To stay close to classes, many students have to eat those rent increases and add to the balance of their student loans, which typically cover tuition and the cost of room and board as estimated by the university. Students who decide they cannot afford the bump in costs may wind up commuting from less-expensive areas far from the college, as a Bloomberg report found last week. In the most extreme cases, high rents can contribute to housing insecurity and be a barrier for homeless students trying to find housing.

[pullquote author=”” description=”” style=”new-pullquote”]“We’ve been underbuilt nationally for most of the past decade. We’re just not building enough new housing to accommodate demand.”[/pullquote] Alexander Hermann, research analyst at the Joint Center for Housing Studies at Harvard University

Some policymakers are starting to become aware of the issue. After a Boston Globe investigation shone a light on the overcrowded and sometimes unsafe conditions for students in off-campus housing, Boston conducted an off-campus housing census and  Mayor Martin Walsh pushed the city’s universities to build more student housing in his 2015 State of the City address. The city launched a small pilot program in 2017 that placed graduate student renters with home-owning seniors, but started with only eight matched pairs.

Discussions about how, exactly, to encourage development of affordable housing lead to increasingly wonky topics — how to streamline planning and zoning processes or eliminate costs to developers such as impact fees. Hermann believes eliminating some of the more onerous regulations can make affordable and middle-market housing developments more economically attractive to builders. Additional federal programs to fund these types of housing developments also could help.

“You’ll need a combination of lower barriers to entry and also federal involvement on some level that just hasn’t been done,” said Hermann. “It will probably have to take the form of both carrots and sticks.”

This story about off-campus housing was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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