The slow progress of our nation’s recovery from the economic recession, combined with the recent explosion of “Is College Worth It?” articles in the mainstream media, has affected both the reality and the perception of college affordability. And with 2012 being a presidential election year, we can expect candidates at all governmental levels to take up the populist call for the higher education sector to reign in its escalating costs. The annual total price at a private college now averages more than what the median minority family earns in a year, and middle-class families are expected to devote approximately one-third of their annual income to college tuition even after scholarships and grants have been factored in.
- Only 22% of Americans agree and 75% disagree that “college costs in general are such that most people are able to afford to pay for a college education,” and only 40% say the higher education system provides good value in relation to its cost. (Pew Research Center)
- 89% of parents of prospective students said “paying for school” was one of their biggest concerns during the college search process, versus only 70% who listed “finding a college that’s a good fit.” (Cappex)
- 62% of first-year students in 2010 agreed (20% agreed strongly) that the “current economic situation significantly affected my college choice.” (CIRP)
- Among high school students who graduated in 2010, 55% of those who went on to college said that being able to afford it was challenging, and 56% of those who did not go on to college said that the cost was more than their family could afford. (College Board)
- The average tuition, fees, and room and board charges at four-year private nonprofit institutions was $38,589 for 2011-12; the average total in-state cost at public institutions was $17,131. (College Board)
- The median household income in 2010 was $49,445; it was $64,300 for Asians, $54,600 for whites, $37,800 for Hispanics, and $32,800 for blacks. (U.S. Census Bureau)
- Average family income decreased 6% for the top quintile and 16% for the bottom quintile from 2000 to 2010. (College Board)
- The net price (total cost less scholarship and grant aid) to attend a private nonprofit institution increased 17.1% from 2000 to 2009. (Center for College Affordability and Productivity)
- Even after grant aid, the percentage of family income required to pay for college in 2007 was 72% for those who made $30,200 or less, 36% for incomes of $30,201 to $54,000, 27% for incomes of $54,001 to $80,400, 21% for incomes of $80,401 to $115,400, and 14% for incomes over $115,400. (Education Trust)
- Approximately two-thirds of 2010 college graduates had student loan debt, with an average of $25,250 for those with debt, a 5% increase from the previous year. (Project on Student Debt)
- 8.8% of federal student loan borrowers who entered repayment in the 2009 fiscal year defaulted by the end of the 2010 fiscal year, compared to 4.6% who entered repayment in 2005. (U.S. Department of Education)
Systemic changes will be required to fix higher education’s unsustainable economic model. Fortunately, there’s no shortage of intellectual capital at colleges and universities, and America is known for its entrepreneurial spirit. Those who can abandon “we’ve always done it this way” thinking will be able to seize opportunities for creative innovation.
Thoughts? Let us know on the blog.
Part of: Trends 2012