Earning a college degree has long been a path to achieving the American dream. But the fast rising cost of tuition is putting the brakes on how quickly students can payoff their loans, buy homes, and become contributing members of our economy. The result: A growing number of Americans, burdened by student loan payments, find themselves struggling to get by and they regret the price they paid to go to college.

A special report by Consumer Reports examines the student debt crisis. In a series of stories, we explain how 42 million people came to owe $1.3 trillion in student loans. Our coverage shines a light on the conflicts in the student loan servicing industry and gives advice on how those headed to college or mired in debt can better manage their costs.

At the Aspen Ideas Festival earlier this week, Consumer Reports convened a group of thought leaders to discuss these issues. Among those in attendance were representatives from the Department of Education, public and private universities, and non-profit organizations.

“We're at a tipping point where the path to upward mobility is being questioned,” said Marta Tellado, president and CEO of Consumer Reports, who led the conversation. Education debt is a serious pain point for consumers and it's difficult to make a rational decision in a market that lacks accountability and transparency, said Tellado. 

A Symptom of Broader Disease in Our Country

Rohit Chopra, special adviser to the Department of Education and formerly the top student financial services regulator at the Consumer Financial Protection Bureau, agreed. “Student debt is a symptom of a broader disease in our country,” he said.

Among the problems are many macroeconomic issues as well as state disinvestment in public universities, which has led to higher tuition prices, forcing people to borrow more.

Chopra says that since the collapse of Lehman Brothers in 2008, outstanding student debt has more doubled. “Many families lost so much wealth during the economic crisis, they couldn’t support their children going to college the way they planned,” said Chopra. The result: “A lot more people have to take on debt to go to college.”

While data shows that people with college degrees earn more over their lifetime than those with less education, college graduates don’t have the earning power that they used to have. Young college graduates’ wages, when adjusted for inflation, have barely budged in more than a decade.

In 2000, for example, the overall average hourly wage for people ages 21 to 24 with a bachelor’s degree was $29.79. Today, it’s a little higher—$31.40, according to The Class of 2016, a report issued earlier this year by the liberal leaning Economic Policy Institute.

“College is still one of the best investments you can make, but for many, a college degree hasn’t paid off the way it was expected it to,” said Chopra. 

Figuring Out the True Cost of College

Lehigh University in Pennsylvania is trying to deal with the problem by capping the amount students can borrow, said Georgette Phillips, dean of the college of business and economics at Lehigh University.

Last fall, Lehigh announced a new financial aid initiative to meet 100 percent of every student’s demonstrated financial need. Students can borrow no more than $5,000 a year or $20,000 overall. Lehigh will cover the rest of the cost through scholarships, grants, and work study jobs. The program takes effect in the 2016-2017 school year and will apply to existing students too.

Even though the sticker price for Lehigh’s tuition, room, board, and fees is more than $60,000 a year, Phillips says it can now be cheaper for some students to go to Lehigh than, say, Penn State. 

But figuring out what the true cost of college will be and how financial aid packages are calculated can bedevil prospective students. “Every financial aid package is different," said Phillips. "We need to do a better job of letting students know that the sticker price isn’t what you will likely pay.”

The problem is even worse for those who are first generation students and minorities. “Many Latino parents just don’t know how to navigate the system,” explained Ivelisse Estrada, senior vice president of corporate and community empowerment at Univision Communications.

She said technology could help simplify the process. One app, College Abacus, for example, helps students compare the net price of more than 5,000 schools by inputting personal information.

Is the Cost Worth It?

Charles Iacovou, dean of the school of business at Wake Forest University, said that one way to help students and their families would be to make more data available to them such as graduation rates and post-graduate earnings. “We can measure outcomes better than we do today and be more effective in communicating those outcomes,” he said.

The Department of Education took a step in that direction when it revamped its College Scorecard tool. You can use the Scorecard to filter schools by graduation rates and 10-year-out median salaries of graduates who received federal aid. But the data is limited to averages by schools. The results could be very different depending on the specific degree you earn. “Averages only tell a partial story,” said Iacovou.

While such data may be helpful, Terri Caine, co-founder of Summit 54, a nonprofit that invests in education opportunities for disadvantaged students, said what really matters is whether there are improvements in employment. “We would like to see a more concerted effort to help students get good paying jobs.”

Boosting Completion Rates

For many, repaying debt becomes almost impossible when they borrow to go to college but never graduate. "A large number of students who don’t graduate don’t realize that they have enough credits and could earn a degree,” said Matthew Leavy, director of global higher education services at Pearson. He says we should be doing a better job of working with students so that they understand that.

Even among those who do earn a bachelor's degree, only 39% do it in four years, according to the National Center for Education Statistics. 

Lashon Amado, national coordinator of the nonprofit YouthBuild USA’s Opportunity Youth United, said he sees such situations often.  His organization focuses on getting disadvantaged young people into college and supporting them to graduation.

Amado points to himself as an example. He is taking on a lot of debt to get his masters and plans to continue working in the non profit field, which isn't high paying initially. “I shouldn’t have to take on a lot of debt to pursue my passion. But I will get my degree and worry about paying for it after.”

Completion rates could be higher if college was better designed to support non-traditional students who are older, go part time, are first generation to go to college or are supporting families. Nearly three out of four postsecondary students today are not enrolled in a full-time, four-year degree program, according to the Bill and Melinda Gates Education Foundation. "Schools can do a better job at supporting non-traditional students," said Iacovo from Wake Forest.  

Lessons From the Housing Crisis

To put the growing education debt crisis into perspective, many attendees at the conference drew parallels to the housing market bubble of the mid 2000s.

Chopra pointed out that both going to college and owning a home are goals that people strive to reach. But when something good, like owning a home, involves toxic mortgages, it can quickly becomes a bad situation.

Chopra says that we may now be at a similar point with student debt. "Since the housing bubble, we’ve added safety features to mortgages and more provided protections for consumers," he said. 
“We must also vigorously put safety nets and protections in place to make sure going to college isn’t such a gamble and that your life isn’t ruined by doing so.”