Higher Education Bubble in America

SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national s 60 debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national s 60 debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national s 60 debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national s 60 debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national s 60 debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars SAVINGS ACCOUNTORG The Education Bubble Today in America, there is growing concern that we are over invested in universities, that too many students attend school, and that much of our investment wasted. The total average annual instructional cost per student is $1,456 $7,000 $8,000 Pubic universities charge, on average, $7,000 per student.. and they get another $8,000, per student from the state. Thus, we are left with colleges being PAID MORE to provide an education THAN THEY SPEND providing an education It is therefore very likely that the divergence is UNSUSTAINABLE, which is strong evidence that higher education is witnessing a BUBBLE in college costs. Rise.Costs Tuition as Share Harvard Tuition Household Income of Income 1957 $800 $5,000 16% n= $1,000 2010 79% $37,000 0en $47,000 Since 1973, almost all colleges, public and private, have increased tuition and fees, on average, 1995-96 | $12,400 Average price of attendance for 1 year, full-fime 1999-2000 | Ş14,600 2003-04 $17,100 by double the CONSUMER PRICE INDEX 2007-08 $22,400 2009-10 | $29,300 Over Investment and Waste Only 35%, about 1-in-3, of college entrants are able to complete and utilize a college degree In total, these funds amount to over These institutions are not broke. 50 U.S. colleges & universities hold Endowment Funds in excess of $1 BILLION each Only 57.3% of students complete a bachelor's degree within six years of enrolling $325 BILLION In 2008,17.4 MILLION college graduates had jobs that, according to job classifications of the U.S. Bureau of Labor Statistics, did not require a college degree. Taxation is not realized from the properties that these schools hold. Only 61% were employed in jobs that requireda college degree In New York City alone, about $350 MILLION in taxation revenue Colleges are labor-intensive institutions, with somewhere between 60-75% going towards salary and fringes. will go unbilled (tax exempt) from private college campuses in fiscal year 2011. Student Loans ILending The rising levels of borrowing may ironically be contributing to the accelerating cost of college Total student loan debt outstanding exceeded total credit card debt outstanding for the first time in June 2010. $15 000 $826,5 BILLION Seasonally adjusted revolving credit as of June 2010 $830 BILLION Student loan debt outstanding as of June 2010 The default rate for a recent cohort of graduates ten years after graduation was 20% for those who borrowed more than $15,000. Guaranteed student loans accounted for more than 75% of the $77 BILLION that students borrowed for the 2006-07 academic year Net Borrowing to Support Federal Direct Student Loan Program (FY1997 - FY2010) 120 -Since-2008-Federal-Direct-Student-Loans- have added nearly $90 BILLION to the 80 LU.S.national.debt.(as.of.the.end.of.EY2010)- That increase accounts for 2.5% of the entire increase in the national s 60 debt, above and beyond the federal -government:'s.annual.deficit. 40 0. 1997-1998 T999 2000 2001 2002 2003- 2004 2005 2006 2007 2008 2009 2010 U.S. Government Fiscal Year Total student loan debt is increasing at a rate of about $2,863.88 PER SECOND! Icing... the A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones of college graduates say it will take them more 39% than 10 years to pay off their education-related debt 44% said they delayed buying a /0 house because of their student luans 28% delayed having children SAVINGS ACCOUNTORG Billions of U.S. Dollars