By Alex Park

Global warming, Iraq, the rise of Russia, China and India and the decline of the world economy: somewhere in here it was proposed by more than a few dreamers and policy wonks that education is the answer to the world’s biggest problems, just as it has been in every generation and every election cycle before this one. The good news is that whatever the state of the world, America is still the leader in higher education and that lead is continuing to keep our future strong. Barack Obama in particular has shuttled between college campuses throughout the United States since campaign season began to espouse his commitment to higher education and its central role in the future of the nation.

“If we can’t give all of our kids a world-class education, then our economy is going to fall behind,” he said at a speech at the University of Colorado in July. Still, if families can’t afford to send their kids to college because of their own financial setbacks, the economy and education may be tied up in a viscious cycle with wide reaching setbacks for our future.

And there’s truth in that statement. But to tie one big issue to another, the reality is that the cost of higher education is going up, slightly faster then the rate of inflation, in fact. But at the same time, credit and incomes are going down, creating a gap between what families have and what they are expected to pay for that- barely manageable before the credit crisis- will become even more formidable in the coming years.

According to a College Board report, tuition and fees are up 5.9 percent since last academic year for private four-year colleges, slightly steeper than the 5.6 percent increase in the Consumer Price Index over the same period. (Macalester’s tuition exceeded the average with a rise of 8.3 percent since 2007).

Last academic year, the volume of private loans shrank by $17.3 million, or about 1 percent, reversing “years of double digit growth,” according to The Chronicle of Higher Education. Analysts say the sudden drop reflects a 2006 easing of restrictions on federal loans (whose volume rose by 6 percent this year after inflation) and not the current credit crisis. But this year, restrictions on private lending have tightened, preventing families from borrowing as much as they need, which will reduce loan volume significantly this year, according to analysts.

The number of Pell Grants rose slightly last year, from 5.2 million to 5.4 million. But “even though grants are rising, they do not make up the difference between growing college costs and family incomes,” Sandy Baum, a policy analyst at the College Board, told The Chronicle.

How’s that for an election issue.