For the first time since the early 1980s, tuition inflation is lower than the rate at which consumer prices are rising, according to a new research paper from S&P Global Ratings.

Expand chart
Data: Federal Reserve Bank of St. Louis via S&P; Note: Total CPI is the Consumer Price Index. Chart: Andrew Witherspoon/Axios

The big picture: Baumol's cost disease, which says that tuition fees are always going to rise faster than inflation, might not be an iron law after all. It's been a decade since Congress increased the amount that undergraduates could borrow from the government, which is effectively constraining tuition increases.

Is there a crisis in student loans? Maybe not.

  • Student debt burdens can be extremely unpleasant for individual borrowers, but they don't seem to be impeding the progress of the economy more broadly. The Americans with the highest student-debt burdens also tend to be the Americans most able to repay those loans: doctors, lawyers, and other professionals.
  • The highest student-loan default rates are found among the students with the lowest student debt burden: borrowers who owe the government less than $5,000.
  • The median ratio of educational debt to income for households under 35 fell 5 percentage points between 2013 and 2016. The situation isn't great, but it's getting better, not worse.

Yes, but: The stock of student debt is already dangerously high, at $1.5 trillion and rising. It has grown by 157% in the past 11 years, even as mortgage and credit-card debts outstanding have remained largely flat.

  • More than 10% of borrowers are more than 90 days behind on their student loans.

The bottom line: "Stronger income growth and slower cost increases are working to bend the leverage trend," as S&P puts it. "This trend of rising student debt isn't necessarily a bad thing. Education is an investment in human capital, and if the skills acquired are valued by employers, then going to college carries a positive net present value — even with debt financing."

Go deeper

22 mins ago - Science

How the brain handles the unknown

Illustration: Sarah Grillo/Axios

Uncertainty can be hard for humans. It drives anxiety, an emotion neuroscientists are trying to understand and psychologists are trying to better treat.

Why it matters: Under the threat of a virus, job insecurity, election uncertainty, and a general pandemic life-in-limbo that is upending school, holidays and more, people are especially anxious.

Updated 37 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Global: Total confirmed cases as of 3 p.m. ET: 34,103,279 — Total deaths: 1,016,167 — Total recoveries: 23,694,869Map.
  2. U.S.: Total confirmed cases as of 3 p.m. ET: 7,255,546 — Total deaths: 207,374 — Total recoveries: 2,840,688 — Total tests: 103,939,667Map.
  3. Politics: House prepares to pass revised COVID relief bill as White House talks hit roadblock.
  4. Health: Health officials urge flu shots, warning of "twindemic" with COVID-19 — Coronavirus infections rise in 25 states.
  5. Business: Remdesivir is good business for Gilead.
44 mins ago - Politics & Policy

Trump pushes back on changes to upcoming presidential debates

Photo: Jim Watson, Saul Loeb/AFP via Getty Images

President Trump suggested Thursday that he'll resist any moves that could cut off candidates' microphones in the next debate if he continues to talk over his opponent and the moderator.

  • "Why would I allow the Debate Commission to change the rules for the second and third Debates when I easily won last time?" he tweeted.

The big picture: White House and campaign officials insist Trump is still committed to two remaining debates, despite fallout from Tuesday including poor reviews and discussions of new guardrails.