Students have more debt than ever before. But the university president who helped propel a tuition arms race says schools are just getting started.
Shortly after Stephen Trachtenberg announced in 2007 that he would step down as president of George Washington University, he strolled alone from his office to the school's library, where he often held informal office hours at the adjoining Starbucks. He bought a cup of coffee and sat at a table outside, contemplating his success.
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The valedictory beverage felt well earned. Since Trachtenberg took over in 1988, he had boosted the school's endowment from $250 million to $1 billion and built many state-of-the-art facilities, such as computer and research labs. The profusion of comforts didn't just stimulate students' minds; it also fulfilled their every whim--a change that drew a more selective, more intelligent group of applicants and sent the admission rate plummeting from 75 percent to 37 percent. "It was a very soothing, very beautiful experience and gave me a great sense of satisfaction about my tenure as president," Trachtenberg wrote in his memoir, Big Man on Campus.
Trachtenberg's students funded this triumph. When he became president, they paid $25,000 (in today's dollars) in tuition, room, and board to attend; by the time he retired, they paid $51,000. Trachtenberg made George Washington the most expensive school in the nation. The burst of cash powered his agenda, but the freshmen who borrowed to enroll--46 percent of the class--during his final year graduated with an average of $28,000 of debt.