The federal government handed colleges a blank check, and they cashed it — building luxury dorms and hiring administrators while 43 million Americans got stuck with $1.7 trillion in student loan debt. That's the business model, and the taxpayer backs every dollar of it.

The scheme was diagnosed nearly 40 years ago. In 1987, Reagan Education Secretary William Bennett laid it out in a New York Times op-ed titled "Our Greedy Colleges": colleges could keep raising tuition because federal financial aid, especially subsidized loans, would always cover the increase. The Bainbridge Review, which traced the history of tuition inflation this week, noted that Bennett's warning was vindicated after Congress expanded the racket in 1992. That year's reauthorization of the Higher Education Act made unsubsidized Stafford loans available regardless of financial need and stripped borrowing limits from PLUS loans. Federal student borrowing jumped 57% in two years, hitting $24 billion by 1994. This year it hit $88 billion.

The numbers tell the story. Economist Richard Vedder found that from 1910 to 1978, inflation-adjusted tuition rose about 1% per year. From 1978 to 2015, it rose 3% per year — triple the historical rate, coinciding almost exactly with the federal government's entry into mass student lending. Nearly 43 million Americans now carry federal student loans. The average balance sits around $40,000. About 3.8 million borrowers owe more than $100,000. More than a million owe over $200,000. And 9 million are in default.

Where the Money Went

College presidents and the American Council on Education blame state funding cuts, federal compliance costs, and technology expenses. What they don't advertise is the amenities arms race. From the mid-1990s through the 2010s, universities tore down traditional dorms and built facilities with private suites, granite countertops, designer furniture, and streaming TV, according to the Associated Press. Maid service. Laundry service. Moving companies so students don't have to pack the SUV. Olympic pools. World-class arenas. Millions spent improving everything except the classroom.

The quality of education, in fact, arguably declined. In the 1950s, teaching loads of 12 or more classroom hours per week were standard. By the early 2000s, federal data showed roughly half of full-time faculty at research universities taught fewer than four hours per week. The Bainbridge Review noted that colleges could keep raising prices because parents and students equated cost with prestige — and because easy borrowing insulated them from the sticker shock until the bills came due.

What's Missing From the Story

The Bainbridge Review traced the dollars and the amenities bloat but stopped short of naming the full administrative apparatus that federal loan guarantees financed. The armies of DEI bureaucrats, the expanded student-life bureaucracy, the associate vice provosts of belonging — none of that made the piece. The Fayetteville Observer, the other outlet in this synthesis, didn't cover the tuition crisis at all; it ran a profile of a Duke basketball recruit adjusting to the American game. A fitting juxtaposition: Duke charges north of $60,000 a year in tuition and room and board, and the local paper covers the basketball team, not the debt machine that funds the whole operation.

The open question is accountability. The 1992 law that supercharged borrowing was bipartisan. The colleges that pocketed the money face no consequences for the defaults. The taxpayers who guarantee the loans eat the losses. And the 9 million borrowers in default are the ones who can least afford to pay for granite countertops they never got to use.