One of the hottest issues in this presidential election is the cost of higher education.

According to Student Loan Hero, a non-profit devoted to helping students pay their debt, about 43 million Americans hold $1.23 trillion in college debt. The International Monetary Fund reports that only 14 countries in the world have a GDP greater than that! Done. 11 percent of these graduates (about 5,000,000) are expected to default on their loans within 10 to 20 years. After graduation, these graduates are joining a skilled workforce in which the average salaries are going down. As if that isn’t bad enough, many companies require credit checks as part of their hiring process, so many students who are close to default on their loans can’t get a job.

So then it makes sense that Bernie Sanders polls well with millennials. His idea to spend more public money to erase student debt sounds like a great idea – only it isn’t. Before giving up on this, hear me out.

If public spending in higher education has been sliced – as Bernie and many others in academia claim – then increasing public spending would make sense. But it hasn’t gone down, it has gone up. Paul Campos of the New York Times calls this lie “a fairy tale in the worst sense, in that it is not merely false, but rather almost the inverse of the truth.” Even after adjusting the figures for inflation, public investment in higher education is 10 times higher than it was in the '60s. To put that in perspective, Defense Spending has increased 1.8 times in the same time frame – and that includes funding the Patriot Act.

Jennifer Delaney from the University of Illinois Press conducted a study on the relationship between Federal Earmarks and State funding. Earmarks are different from Congressional appropriations because they skip normal review procedures and are not always included in the Federal Budget. She found that “Earmarks are not just large, but are growing at a rapid rate” (Delaney 4). She also found that State funding goes up $4 for every $1.50 in earmarks spent in their state. So state funding and federal funding are rising at proportional rates.

The confusion here is in the interpretation of the data. If you look at the per-student basis, Public Investment has gone down. The Left uses this statistic to justify their arguments, but it is a misunderstanding of the way money works. What I mean is that they have a hard time doing what is commonly called “Thinking on the Margin.” Stay with me…I’ll explain.

According the National Center for Education Statistics, our national student enrollment has increased by 35 percent since 2000. That’s a pretty steep increase in demand. What does this mean for our funding per student? Let’s say your university has 5,000 students. How much does it cost to educate and house one more student? The answer varies, but typically it’s pretty simple – almost nothing (up to a certain point). Now - how much money does one student bring in to the institution? If we use the national average, it’s around $9,000 annually (not including federal and state grants and scholarships). MORE students means LOWER costs per student! SO…each additional student yields a higher profit than the last. Ultimately, when more students attend an institution, the school earns a higher profit PER STUDENT. This is the margin that colleges, businesses, local governments, (the list continues) think on. So when the left argues that Public Investment has gone down, just know that they are not considering basic Accounting 101 in their argument.

So then why has tuition quadrupled in the last 35 years?

Because everyone wants to go to college! Our workforce is so competitive that it is nearly impossible to build a career without a college degree – and the schools know it! But to find out more of why YOUR tuition is SO much higher than anywhere else in the world, you have to look at WHAT your school spends its money on - the issue is not public funding.

I will be addressing that issue next week as I discuss the relationship between athletics and education.

If you'd like to learn more about fixed and variable costs that determine costs per student, check out this link.