The Real Cost of Higher Education

This September, millions of young Americans will start college, but at what cost?

Each year, the collective student loan debt skyrockets as tuitions continue to rise and graduates compete for scarce jobs with stagnant wages. From 2011 to 2013, the amount of debt held by recent graduates increased a whopping 20 percent, reaching a total more than $1.2 trillion.

While Americans struggle to pay off their loans, big banks and financial institutions spend millions to influence elections and prevent policy solutions that might hinder their profits. Every year, Wall Street companies rake in almost $45 billion in revenue from higher education, largely derived from student loans.

In what is obviously a growing crisis in America, comes little relief from Washington. Young Americans and their families are desperate for a lifeline, while Congress continues to push their own agenda and that of their donors ahead of voters.

Last year, the student loan industry spent at least $4.5 million on lobbying efforts, followed by $1 million in political contributions. Sallie Mae, a publicly traded company and the nation's biggest student loan lender, has spent about $3 million every year since 2007 to lobby against bills that would aid college graduates.

The collective lobbying efforts of the student loan industry, and the millions in lobbying donations, pay off by the billions.

It should come as no surprise that the college lending industry relies on aggressive lobbying campaigns to block any efforts to overhaul or reform the system.

Pell Grants and similar needs-based financial aid programs have decreased to the lowest amounts since the programs' launch, state spending on students has also dropped, leaving them with little choice but to take out loans to finance their education. On top of this, interest rates on private loans spiked during the 2000s, although the Treasury stepped in to stop the bleeding with a fixed 10-year rate.

While students cycle through various loan and repayment plans, the government continues to gain from its cozy relationship with student debt lenders. Through collection companies, the government raked in nearly $66 billion in profit and is estimated to make $184 billion by 2019. The federal government collects almost 100 percent of the principle on defaulted loans, often with an additional 20 percent in fees on top. Of course, this is all at the expense of working families and graduates, who paid nearly $34 billion in interest on student loans in 2012.

In the past decade, Sallie Mae has spent considerable resources to influence politicians and regulators at the expense of students and taxpayers. While The New York Times has dubbed Sallie Mae's lobbying tactics as "aggressive", its political involvement with candidates is far more menacing. During the 2012 election, Sallie Mae donated a total of $92,000 to House Speaker John Boehner, who they have long courted to do their dirty work in Congress. While serving as committee chair, Boehner took the lead against the Bankruptcy Act of 2005, which essentially stripped student loan borrowers of the ability to discharge student debt.

According to the Center for Responsive Politics, lawmakers who side with Sallie Mae on key issues, have collected more money on average than those who have not. With the right sized check, Sallie Mae is able to make and keep friends in Congress while securing policies that increase profits.

The current student loan system is broken. And money in politics continues to prevent legislation to fix it. It's a prime example of what happens when businesses and government get too friendly, with little regard for those they represent.

Increased outside spending in elections is taking a toll on young Americans, and on the policies that directly affect them. Thanks to the Supreme Court's 2010 Citizens United ruling, which lifted restrictions on corporate spending in elections, Wall Street institutions have nearly doubled their donations, according to the Center for Responsive Politics.

A major overhaul is needed to prevent further damage to our economy and to ensure that students and recent graduates have a say.

Students cannot afford to leave decision making to lawmakers beholden to big money interests. Higher education is not a business conquest and it should not be a honeypot for candidates and institutions looking for their next donation. It's time to start demanding more disclosure and real reform that will place the interests of millions of American students above those of the 1%.