The statistics are overwhelming: Americans are currently $1 trillion in debt due to student loans, an amount larger than the nation’s collective credit card debt. Still, the importance of a college degree for an individual’s future earning ability remains obvious: a college graduate can expect to earn 84 percent more over their lifetime than a high school graduate.

Since 1999, the average tuition at public four-year colleges rose 73 percent while median income dropped 7 percent. On July 1st, the interest rate for federal student loans is scheduled to double, something that President Obama says will result in the equivalent of a $1,000 tax hike on 7.5 million students currently trying to get or keep jobs in the aftermath of the great recession.

Two-thirds of college graduates leave school in debt with the average debt being $25,000. The college debt debacle will have a rippling effect through the economy for the next decade at least. This includes a negative impact on the housing market as buyers will be fewer and farther between.

As state governments continue to hurl education in harm’s way like a recklessly played pawn in an amateur game of chess, public universities are struggling to provide the college experience that is promised to a student coughing up thousands of dollars per semester. Higher tuition rates have created a situation in which it is nearly impossible to pay for school by working while attending it:

Take the University of Washington. Twenty-five years ago, a student who worked half time during the school year and full time in summer could pay for college, says Patrick Callan, president of the Higher Education Policy Institute, whose institute recently studied tuition rates there. “That’s not true anymore,” he adds. “You couldn’t even come close.”

More and more students require financial aid and loan assistance, yet universities face no repercussions for making their services less and less affordable. It is a sellers market that goes brutally unchecked. With much of the university product focused on “experience” and the networking opportunities that result, large colleges and universities have escaped a tangible discussion about how the product they are offering relates to the fees they are demanding.

“There’s a lack of incentive in higher education to be cost-efficient,” says Richer Vedder, director of the Center for College Affordability and Productivity, a think tank on higher education finance. Constituencies that usually matter most to college administrators are faculty, alumni, and, to a lesser extent, students, he notes. Parents, who are often footing the bill, don’t factor in much, and even many students with loans are not yet thinking about the cost.

Alumni want new stadiums and good football teams; faculty want good salaries and a low teaching load; students want nice dorms and facilities – all things that cost money.

There are a handful of public universities, however, that are trying to buck the trend and are taking it upon themselves to become more efficient in order to prevent tuition increases. One such institution is the University of Maryland:

At the University of Maryland, where cost-cutting is a priority, “course redesign” is under way throughout the 11-campus system. Working with the Center for Academic Transformation, the state’s public colleges have changed the designs of lower-level “bottleneck” courses: ones with high failure and attrition rates and large class sizes, often in math and sciences.

More important, Kirwan says, is that the university system earned credibility with state government – and helped to persuade law-makers to avoid draconian cuts during the recent recession.

A couple hours down I-95 from College Park, MD, the opposite situation arose and was promptly (if only temporarily) righted. University of Virginia President Teresa Sullivan was forced to resign over her (vaguely explained) refusal to enforce cost-cutting measures. This generated an outpouring of alumni, student, and political contempt for the direction the University’s Board of Visitors wanted to take the school. Enough was made of the situation that Sullivan was reinstated this week, though many fear the pro-austerity players will remain vigilante in demanding changes at Thomas Jefferson’s old home.

Sullivan has promised incremental changes — not the sweeping initiatives proposed by her detractors — while her supporters contends that she has been focused on cutting costs and creating a more efficient institution for some time.

The Governor may have had a positive involvement in clearing up the Sullivan malay, but reduced state funding on his watch remains at the root of the issue:

[Rector Helen] Dragas has said the university faces several issues ahead: challenges from reduced federal and state funding, a rapidly shifting health care environment that she said will necessitate changes at the U.Va. Medical Center; heightened pressure to better allocate scarce resources; changing technology and more.

U.Va. expects to get about 10 percent of its operating budget from the state of Virginia this fiscal year. Public funding per in-state student has fallen to an estimated $8,310 in 2012-13, down from $15,274 per in-state student in 2000-01, according to the university.

Another aspect of the student debt crisis revolves around young people taking out loans without complete, long-term understanding of the responsibilty. In many fields, a college degree is an absolute necessity, making the investment essentially mandatory. For example, someone wanting to become a mechanical engineer would have a tough time educating themselves enough on the process to become established in the field. In other fields such as music and fine arts, though, the value of a college degree is consistently called into question.

Recent reports have shown that the student debt crisis has direct links to the mortgage crisis that ushered in the Great Recession by placing more responsibility on students and prolonging the housing situation. The new generation of potential homeowners are steeped in debt. Young professionals try to maintain stable work while paying bills and loans but home ownership, once a staple of the American dream, is now an afterthought. The problem also affects parents paying for their children’s educations:

“The rising student loan debt problem is another consequence of the housing downturn,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “As more and more parents face tighter budget restraints as a result of lower home values, this is forcing an increasing number of students to take out loans for tuition, essentially shifting some of the burden of paying for college from parents to students.”

The link between rising student loan debt and the start of the housing crisis comes on the heels of a recent report from the Federal Reserve showing that U.S. household wealth plunged nearly 40 percent from 2007 to 2010 as a result of declining home values.

But the crux of the problem remains the cost of education, not loan rates. The President’s plan to stop federal loan rates from doubling is a temporary fix to a highly complex problem. It will help those affected but it does not inoculate the next wave of college graduates against affliction.

There is legislation looking at the bigger picture, such as the Student Loan Forgiveness Act of 2012, proposed by U.S. Rep. Hansen Clarke (D-MI):

This bill would make a number of changes to the student loan process. The first and most far-reaching is the “10/10 Loan Repayment Plan,” where 10 percent of a debtors’ income would be automatically withdrawn to go toward repayment of federal loans for 10 years, at which point the remaining balance would be forgiven.

But the forgiveness provision is not the only good thing about this act. It also caps interest rates for federally subsidized student loans at 3.4 percent. That’s a big deal since the interest rate for Stafford loans is set to rise to 6.8 percent on July 1 of this year if Congress doesn’t act to change this.

The idea is similar to one proposed by former Democratic presidential candidate Howard Dean during the 2004 campaign.

No matter the end game, it is obvious that something must be done to stem the tide. The promise of a good job resulting from a college education is becoming harder to keep. Never has a generation been so unprepared to partake in the American dream of home ownership. Perhaps as pressing as investing in America is the idea of allowing Americans to manageably invest in themselves, to create a system in which risk and reward are tangibly related, where advancement is in line with imbursement, and where “staying in school” isn’t just an old adage with a new, six-figure price tag — it’s actually the right thing to do.