Fast Facts on Education in America UPDATED FEBRUARY 2014

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1 Fast Facts on Education in America UPDATED FEBRUARY 2014 The climate of postsecondary education in America has changed dramatically since Scholarship America s inception more than 55 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 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 2011, four-year college graduates earned $21,100 more than those with just a high school diploma ($56,500 vs. $35,400). The earnings of college graduates increased more rapidly from 2009 to 2011 than the earnings of high school graduates. 2 College graduates are more likely to have access to quality health care, 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 in taxes and engaging in more civic and volunteer opportunities. 4 In 2012, the unemployment rate for individuals ages 25 and older with at least a four-year college degree was 4%, 4.3 percentage points lower than than the 8.3% unemployment rate for high school graduates. The unemployment rate for individuals with at least a bachelor s degree has consistently been half the unemployment rate for high school graduates for the last 20 years HELP WANTED: PROJECTIONS OF JOBS AND EDUCATION REQUIREMENTS THROUGH GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE, JUNE EDUCATION PAYS 2013: THE BENEFITS OF HIGHER EDUCATION FOR INDIVIDUALS AND SOCIETY. COLLEGE BOARD, OCTOBER EDUCATION PAYS 2013: THE BENEFITS OF HIGHER EDUCATION FOR INDIVIDUALS AND SOCIETY. COLLEGE BOARD, OCTOBER SMART SHOPPERS: THE END OF THE COLLEGE FOR ALL DEBATE? COLLEGE SUMMIT AND BELLWETHER EDUCATION PARTNERS, NOVEMBER EDUCATION PAYS 2013: THE BENEFITS OF HIGHER EDUCATION FOR INDIVIDUALS AND SOCIETY. COLLEGE BOARD, OCTOBER Page 1

2 NATIONAL PROSPERITY THROUGH AN EDUCATED WORKFORCE America is coming slowly coming out of economic recession, but 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 percentage of households living in poverty in 2011 for individuals ages 25 and older: bachelor s degree or higher, 5%; associate degree, 8%; some college but no degree, 11%; and high school graduates, 14%. 3 Although college attainment rates have been increasing, they have been increasing slowly a number of countries have now surpassed the U.S. in percentage of younger adults with a postsecondary degree. 4 * By 2020, 65% of all jobs will require postsecondary education and training, up from 28% in This is an increase of 6 percentage points from 2010 and 9 percentage points from the 1990s, which leaves fewer jobs for those with a high school diploma or less. 5 Nearly four out of every five jobs destroyed by the recession were held by workers with a high school diploma or less. 6 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 The dramatic decline in the value of a high school education means that the earnings gap between college graduates and high school graduates is the widest in nearly 50 years. 8 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 next page 1. EDUCATION PAYS 2013: THE BENEFITS OF HIGHER EDUCATION FOR INDIVIDUALS AND SOCIETY. COLLEGE BOARD, OCTOBER A STRONGER NATION THROUGH HIGHER EDUCATION. LUMINA FOUNDATION, UPDATED JUNE EDUCATION PAYS 2013: THE BENEFITS OF HIGHER EDUCATION FOR INDIVIDUALS AND SOCIETY. COLLEGE BOARD, OCTOBER EDUCATION AT A GLANCE 2013: OECD INDICATORS. ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, JUNE RECOVERY: JOB GROWTH AND EDUCATION REQUIREMENTS. GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE, JUNE THE COLLEGE ADVANTAGE: WEATHERING THE ECONOMIC STORM. GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE, AUGUST HELP WANTED: PROJECTIONS OF JOBS AND EDUCATION REQUIREMENTS THROUGH GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE, JUNE THE RISING COST OF NOT GOING TO COLLEGE. PEW RESEARCH CENTER, FEBRUARY 11, Page 2

3 COMPARING DEVELOPED NATIONS IN THE PERCENTAGE OF YOUNG-ADULT 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, led all other nations for most of the postwar period. Today, the attainment rates in other countries continue to climb at a faster rate than the U.S. Lumina Foundation for Education estimates that by 2025, the U.S. will face a shortage of 16 million educated adults A STRONGER NATION THROUGH HIGHER EDUCATION, A SPECIAL REPORT FROM LUMINA FOUNDATION FOR EDUCATION, FEBRUARY Page 3

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. Tuition and fees have surged 1,120% since records began in 1978 four times faster than the increase in the consumer price index. 1 Many students are facing larger increases in tuition, despite a smaller increase in published prices, as a result of less federal grant aid from While half of all people from high-income families have a bachelor s degree by age 25, just one in 10 people from low-income families do. 3 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 middle- and high-income families. In 2012, 50.9% of low-income high school graduates were enrolled in a two- or four-year college only a half percentage higher than the rate in Academically-qualified low-income students are less likely to enroll in college, more likely to attend two-year colleges when they do enroll, and less likely to apply to more selective institutions compared to their more advantaged peers with similar academic preparation COST OF COLLEGE DEGREE IN U.S. SOARS 12 FOLD: CHART OF THE DAY. BLOOMBERG.COM, AUGUST 15, TRENDS IN COLLEGE PRICING COLLEGE BOARD, OCTOBER INCREASING COLLEGE OPPORTUNITY FOR LOW-INCOME STUDENTS: PROMISING MODELS AND A CALL TO ACTION. THE EXECUTIVE OFFICE OF THE PRESIDENT, JANUARY HIGH SCHOOL BENCHMARKS NATIONAL STUDENT CLEARINGHOUSE RESEARCH CENTER, OCTOBER 15, HIGH SCHOOL BENCHMARKS NATIONAL STUDENT CLEARINGHOUSE RESEARCH CENTER, OCTOBER 15, Page 4

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 of 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 decide 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 In 2012, college graduates carried an average of $29,400 in student loan debt. From , debt at graduation increased an average of 6% each year. 2 In just a decade, the total number of federal student loan borrowers increased by 69%, from 5.9 million in to 10 million in A higher percentage of low-income students borrow money for college. Low-income families continue to be the most concerned about meeting the costs of college. 4 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. 5 30% of bachelor s degree recipients graduated with private loans during the year, with an average private loan debt of $13, % of students graduating from for-profit colleges in borrowed an average of $39,950 43% more than graduates from other four-year colleges. 7 44% of undergraduate students who took out risky private loans in did not use the maximum available in safer federal student loans. 8 Young people sign on to these loans at 17 or 18 with little or no financial planning experience. 9 Student loan debt has surpassed $1 trillion, making it the largest form of consumer debt outside of mortgages. 10 Experts say this may be the next financial bubble to burst STUDENT DEBT AND THE CLASS OF THE PROJECT ON STUDENT DEBT, DECEMBER STUDENT DEBT AND THE CLASS OF THE PROJECT ON STUDENT DEBT, DECEMBER TRENDS IN STUDENT AID COLLEGE BOARD, OCTOBER HOW AMERICA PAYS FOR COLLEGE SALLIE MAE, JULY STUDENT DEBT AND THE CLASS OF THE PROJECT ON STUDENT DEBT, DECEMBER STUDENT DEBT AND THE CLASS OF THE PROJECT ON STUDENT DEBT, DECEMBER STUDENT DEBT AND THE CLASS OF THE PROJECT ON STUDENT DEBT, DECEMBER STUDENT DEBT AND THE CLASS OF THE PROJECT ON STUDENT DEBT, DECEMBER STUDENT LOAN SINKHOLE?, NOW ON PBS, JUNE 19, STUDENT DEBT SWELLS, FEDERAL LOANS NOW TOP A TRILLION. CONSUMER FINANCIAL PROTECTION BUREAU, JULY 17, STUDENT LOAN SINKHOLE?, NOW ON PBS, JUNE 19, Page 5