February 5, 2015

(Educators)From November 2013 through November 2014, the aggregate balance in the federal direct student loan program -- as reported by the Monthly Treasury Statement -- rose from $687,149,000,000 to $806,561,000,000, a one-year jump of $119,412,000,000.

The balance on all student loans, including those from private sources, exceeded a trillion dollars as of the end of the third quarter, according to the Federal Reserve Bank of New York.

"Outstanding student loan balances reported on credit reports increased to $1.13 trillion (an increase of $8 billion) as of Sept. 30, 2014, representing about $100 billion increase from one year ago," the bank said in its latest report on household debt and credit.

Seven years ago, in November 2007, the aggregate balance in the federal direct student loan program was only $98,529,000,000. Since then, it has grown by $708,032,000,000.

This is money that young Americans owe the federal Treasury -- and that gives the federal government leverage over their lives.

"Under the DL program, the federal government essentially serves as the banker -- it provides the loans to students and their families using federal capital (i.e., funds from the U.S. Treasury), and it owns the loans," explains the Congressional Research Service.

In fact, the program is a government-funded redistribution of wealth to colleges and universities.

The question is: Who will ultimately pay for that wealth transfer?

In 2013, the National Center for Educational Statistics published a study of student aid in the 2011-2012 school year. It showed that 40.2 percent of students attending a post secondary school had a federal student loan.

The percentages were higher for full-time students and those who attended four-year colleges. Fifty-five percent of students attending college full-time had a federal loan, 58.1 percent of those attending a four-year doctorate-granting institution had a federal loan, and 61.4 percent of those attending a four-year non- doctorate granting institution had a federal loan.

The average amount of a federal student loan during that school year was $6,500.

In 2012, according to the National Association of College and University Business Officers, the University of Texas System had an endowment of $18,263,850,000 -- the largest of any state university system. In 2013, that endowment grew 12 percent -- or $2,184,463,000 -- to hit $20,448,313,000.

Yet, according to the College Board, an in-state student attending the University of Texas at Austin during this school year will pay $26,324 in total costs (including $9,798 in tuition; $11,456 in room and board; $760 for books; $2,280 in personal expenses; and $1,490 in transportation expenses). …