Fast Facts on Education in America
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- Myrtle Foster
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1 Fast Facts on Education in America updated december 2010 The climate of postsecondary education in America has changed dramatically since Scholarship America s inception 50 years ago. Access to college has hit a critical juncture for the first time in decades, American students are achieving degrees at lower rates than other countries, and recent news stories point to decreasing enrollment among low- and middle-income students, increasing tuition rates and growing student loan debt. Yet earning a college degree remains essential for both individual and national economic success. INDIVIDUAL PROSPERITY THROUGH POSTSECONDARY EDUCATION An increasingly competitive global market has eliminated what used to be a large number of middle-class jobs in America that didn t require college-level knowledge or skills. Although there are still lower-skill jobs available, most Americans who hold these jobs will likely slip below the middle class. Earning a college degree remains one of the most lucrative investments a person can make. As the economy continues to recover over the next few years, 60 million Americans are at risk of being excluded from the middle class and will remain trapped in lowwage jobs that require a high school diploma or less.1 In 2008, four-year college graduates earned nearly $22,000 more than those with just a high school diploma ($55,700 vs. $33,800). The earnings of college graduates increased more rapidly from 2005 to 2008 than the earnings of high school graduates.2 College graduates are more likely to have access to quality health care, volunteer in the community, save money for retirement and have the ability to send their own children to college.3 College graduates contribute more to the economy spending more money, paying more taxes, and volunteering more in the community.4 In 2009, unemployment rate the average annual unemployment rate was 7.9% for individuals ages 25 and older, rising sharply for all levels of educational attainment. The unemployment rate for those with at least a four-year college degree was 4.6%, 5.1 percentage points lower than the 9.7% unemployment rate for high school graduates Help wanted: Projections of jobs and education requirements through Georgetown University Center on Education and the Workforce, June Education pays: 2010, The benefits of higher education for individuals and societies. College board, Education Pays 2010 Report Shows College Graduates Weather Recession Better Than Others, college board, 4. A Stonger nation through education, Lumina foundation, Education pays: 2010, The benefits of higher education for individuals and societies. College board, Page 1 of 6
2 National prosperity through an educated workforce Though it may seem like it s happening at a snail s pace, America is slowly coming out of economic recession. Experts agree that economic recovery is dragging due to a lack of skilled workers that present jobs demand.1 America needs to drastically increase its postsecondary educated workforce in order for the country to prosper and compete in a global marketplace, today and in the future.2 The 2008 poverty rate for: bachelor s degrees, 4%; associates degree, 7%; some college but no degree, 9ç; and for high school graduates, 12%.3 College-attainment rates are rising in almost every industrialized or post-industrial country in the world, except for the U.S.4 * Between 1973 and 2008, the share of jobs in the U.S. that required postsecondary education increased from 28% to 59%. Over the next decade, the share of postsecondary jobs will increase from 59% to 63%, leaving high school graduates and dropouts behind.5 By 2018, 60% of jobs in America will require some level of post-high school education.6 In 2008, less than 38% of working-age Americans held at least 2-year degrees.7 America needs 22 million new college degrees by 2018, but will fall short of that number by at least 3 million degrees a deficit of 300,000 college graduates every year, between 2008 and For all students, earning a college degree leads to increased job satisfaction and increased pay. For communities across the country, an educated citizenry leads to greater civic engagement, higher tax revenues and less crime. For America, it allows us to remain competitive in a global economy. Never before in our nation s history have we had so much to gain from helping people achieve their dream of a college education. *See graph on opposite side. 1. Education pays: Benefits of higher education for individuals and society, College Board, A stronger nation through higher education, A Special Report from Lumina Foundation for Education, February, Education pays: 2010, The benefits of higher education for individuals and societies. College board, A stronger nation through higher education, A Special Report from Lumina Foundation for Education, February, Help wanted: Projections of jobs and education requirements through Georgetown University Center on Education and the Workforce, June Education pays: 2010, The benefits of higher education for individuals and societies. College board, President s Message, Focus. Lumina Foundation for Education, Fall Help wanted: Projections of jobs and education requirements through Georgetown University Center on Education and the Workforce, June Page 2 of 6
3 comparing states and developed nations in the percentage of youngadult degree attainment (ages 25-34) College attainment rates are rising in almost every industrialized or post-industrial country in the world, with the exception of the United States. Our 39 percent attainment rate, which has held steady for the last four decades, once led all other nations for most of the postwar period. Today, the attainment rates in other countries continue to climb while ours remains stagnant. Lumina Foundation for Education estimates that by 2025, the U.S. will face a shortage of 16 million educated adults Massachusetts Canada (55%) Japan (54%) Korea (53%) Minnesota North Dakota Connecticut - Colorado - New York New Jersey- Vermont - New Hampshire Maryland - Nebraska - Illinois Virginia - Iowa Rhode Island - S. Dakota - Wisconsin - Washington Pennsylvania - Kansas - Delaware Hawaii Utah - Montana Michigan - North Carolina - Georgia Ohio - Missouri - Org. - Wyom. - Calif. - Flla. - Maine Indiana Idaho - South Carolina - Arizona Texas - Alabama - Tennessee - Alaska Oklahoma Kentucky - New Mexico Mississippi - Louisiana West Virginia - Arkansas Nevada Source: Organisation for Economic Co-operation and Development, Education at a Glance, New Zealand (44%) Belgium - Ireland - Norway (42%) Denmark - France (41%) UNITED STATES - Australia - Spain -Sweden (39%) UK (37%) Netherlands (36%) Switzerland (32%) Poland (28%) Greece (27%) Germany (22%) 20 Mexico (19%) 10. A stronger nation through higher education, A Special Report from Lumina Foundation for Education, February, Page 3 of 6
4 The skyrocketing cost of a college degree When President Roosevelt signed the G.I. Bill of Rights into law in 1944, the cost of attending college averaged less than $100 per year and generally kept pace with inflation for the next four decades. But over the last 20 years, tuition has skyrocketed, increasing at an average annual rate of 4.9% per year beyond the general rate of inflation. Many families are simply unable to keep up with the high cost of attending college, causing them to make the choice between graduating with thousands of dollars in student loan debt, or foregoing their dream of a college degree altogether. Private scholarships have never been more essential to helping dreams of a college education come true. From 1992 through 2001, tuition at four-year public colleges and universities increased faster than family income in 41 states.1 For every $1,000 increase in tuition, enrollment rates among students from poor families drops 5%.2 During the , the average cost of tuition and fees at public, four-year colleges rose 6.5%. Though official data hasn t been released yet, tuition hikes for the school year were significantly more.3 One-third of all dependent undergraduate students are from high-income families, while just 13% are from low-income families.4 Despite dramatic increases in tuition costs, enrollment has accelerated sharply in the last decade. However, -- Most of the growth in dependent undergraduate enrollment rates were from students in high-income families (more than one-half of enrollment increases). -- Low-income students accounted for less than 5% of the growth. -- As a result, one-third of all dependent undergraduate students are now from high-income families, while just 13% are from low-income families.5 Between 1992 and 2004, initial enrollment rates at four-year instuitions among academically qualified low- and moderate-income students dropped from 54% to 40%.6 1. Losing ground: A national status report on the affordability of American higher education, The National 2. Losing ground: A national status report on the affordability of American higher education, The National 3. Trends in college pricing: 2009, College board. 4. The Growing imbalance: Recent trends in U.S. postsecondary education finance, A report of the Delta Cost Project. 5. The Growing imbalance: Recent trends in U.S. postsecondary education finance, A report of the Delta Cost Project. 6. Focus, lumina foundation, fall Page 4 of 6
5 Mounting student debt Due to the dramatic increase in the price of college over the last two decades, more and more families have to take out tens of thousands of dollars in loans in order to cover the cost a college degree. Instead of focusing on their education, many students are juggling multiple jobs in order to pay for living expenses, books, and tuition. Without the help of private scholarships, students are being forced to make the choice between massive student debt or sacrificing their dream of a college education. Private scholarships have never been more essential to helping dreams of a college education come true. The most widespread response to increases in the cost of higher education is to undertake student loan debt.1 College seniors who graduated in 2009 carried an average of $24,000 in student loan debt, up 6% from the previous year. 2 33% of bachelor s degree recipients graduated with private (nonfederal) loans during the year, with an average private loan amount of $12,550. Students graduating from private for-profit colleges are the most likely to have taken out private loans, with 64% of seniors graduating with private loans. 3 Private student loans are not subsidized by the government and are made to students by private banks and lenders, as well as by some states and colleges. Private student loans are one of the riskiest ways to pay for college. 4 In 1981, loans accounted for 45% and grants for 52% of federal student financial aid. In 2000, loans represented 58% of federal student financial aid, and grants represented 41%. 5 A higher percentage of low-income students borrow money for college, and borrowing is a much larger burden on low-income families. 6 Two-thirds of private loan borrowers did not take out all they could in safer, more affordable federal loans, and a majority of private loan borrowers in attended schools with tuition and fees of $10,000 or less. African-American students were the most likely to take out private student loans.7 -- Young people sign on to these loans at 17 or 18 with little or no financial planning experience million people - 1/4 of the US population - owe a collective $700 billion in student loan debt, and the rates of default are on the rise. Experts say this may be the next financial bubble to burst Student debt and the class of 2009, The Project on Student Debt, an initiative of The Institute for College 2. Student debt and the class of 2009, The Project on Student Debt, an initiative of The Institute for College 3. Student debt and the class of 2009, The Project on Student Debt, an initiative of The Institute for College Page 5 of 6
6 4. Student debt and the class of 2009, The Project on Student Debt, an initiative of The Institute for College 5. Losing ground: A national status report on the affordability of American higher education, The National 6. Losing ground: A national status report on the affordability of American higher education, The National 7. Private Loans: Facts and Trends, The Project on Student Debt, August 25, Student Loan Sinkhole, PBS, June 19, Student Loan Sinkhole, PBS, June 19, 2009 Page 6 of 6
Fast Facts on Education in America UPDATED FEBRUARY 2014
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