Al Lord, who served as Sallie Mae CEO from 1997 to 2005, now says the loan system is criminal

The average tuition and room and board at most four-year private colleges in the United States has risen by nearly 800 percent since 1980, or more than five times the rate of inflation. Today, a four-year degree at a private college costs nearly $200,000 on average. Meanwhile, a public college costs half that for in-state students but almost as much for those from out of state.

At the University of Alabama, for instance, out-of-state students pay $180,000 for a four-year education, and even after grants and scholarships are factored in, many Alabama students and their parents take on tens of thousands of dollars in debt, and in some cases more than $100,000, Mitchell writes.

And that’s the cheap option. At the University of Southern California’s dental school, tuition and room and board cost $152,000 – for the first year.

Ed Fox, the first CEO of Sallie Mae, the quasi-public agency created by Congress to act as a middleman for the student-loan industry

But those ridiculous tuition fees didn’t come out of nowhere. The problem started when the federal government gave families a blank check to allow students to attend the school of their choice, regardless of its cost. The more Americans borrowed, the more colleges raised tuition. Colleges have abused their tremendous pricing power, Mitchell writes.

Lyndon B. Johnson, as the Senate majority leader, first argued for the federal government to create a student loan program in the 1950s. His idea had the best of intentions – Johnson himself had benefited from student loans – but it soon evolved into what Mitchell describes as the quintessential form of crony capitalism. Read more