Paying for college is a significant burden on Americans today.

College student loan debt now surpasses $1 trillion. That’s more than Americans owe on their credit cards and car loans, and that amount is projected to grow $100 billion annually. The average college senior’s debt burden now exceeds $25,000.

Meanwhile, the unemployment rate among recent college graduates reached a record high of 9.1 percent in 2010, making it difficult to repay loans. Student loan default rates are rising, from 7 percent in 2009 to nearly 9 percent 2010. This translates into more than 320,000 defaults out of nearly 4 million student borrowers. College loan debt hurts both individual students and the national economy.

Yet recent laws to make college affordable, including making the U.S. government the sole student loan provider, ignore the problem of rising college costs and inefficiency. In fact, because they allow colleges to capture these additional subsidies (rather than pass them on to students), these government efforts may actually make the problem worse.

Rather than having federal subsidies chase rising college costs, policymakers should focus on reforms that will give potential students more information about the real benefits and costs of a pursuing a degree, and encourage educational institutions to become more efficient at controlling costs and providing students the skills they need for careers after college.

Read the 6-page policy focus here in PDF.