Dystopian Scenario 2014

In 2014…

Because the unusually rapid increases in the middle of the decade were more than offset by small price increases since 2012-13, average published tuition and fees at public four-year colleges and universities increased less rapidly between 2004-05 and 2014-15 than over the two preceding decades.

The average annual inflation-adjusted increase in published tuition and fees at private nonprofit four-year institutions declined from 4.0% to 3.0% to 2.2% over the three decades from 1984-85 to 2014-15.

The rapid increase in tuition and fees at public two-year colleges between 1984-85 and 1994-95, followed by two decades of more moderate increases, has yielded an average annual growth rate of 3.1% per year beyond inflation in this 30-year period.

Over the 30 years from 1984-85 to 2014-15, average published tuition and fees at private four-year institutions rose by 146%, from $12,716 (in 2014 dollars) to $31,231. The average published price at public two-year colleges rose by 150%, from $1,337 to $3,347, and the increase for in-state students at public four-year institutions was 225%, from $2,810 to $9,139.

In 2012, 71% of all students graduating from four-year colleges had student loan debt.That represents 1.3 million students graduating with debt, up from

1.1 million in 2008 and 0.9 million in 2004. In 2012:

66% of graduates from public colleges had student loans.

75% of graduates from private nonprofit colleges had student loans.

88% of graduates from for-profit colleges had student loans.

Average debt levels for all graduating seniors with student loans rose to $29,400 in 2012 — a 25% increase from $23,450 in 2008. In 2012:

•At public colleges, average debt was $25,550 — 25% higher than in 2008, when the average was $20,450.

•At private nonprofit colleges, average debt was $32,300 — 15% higher than in 2008, when the average was $28,200.

•At for-profit colleges, average debt was $39,950 — 26% higher than in 2008, when the average was $31,800.

Unemployment and underemployment rates among young graduates are improving but remain substantially higher than before the recession began.

For young college graduates, the unemployment rate is currently 8.5 percent (compared with 5.5 percent in 2007), and the underemployment rate is 16.8 percent (compared with 9.6 percent in 2007).

The large increases since 2007 in the unemployment and underemployment rates of young college graduates, and in the share of employed young college graduates working in jobs that do not require a college degree, underscore that the current unemployment crisis among young workers did not arise because today’s young adults lack the right education or skills. Rather, it stems from weak demand for goods and services, which makes it unnecessary for employers to significantly ramp up hiring.

The long-run wage trends for young graduates are bleak, with wages substantially lower today than in 2000. Since 2000, the real (inflation-adjusted) wages of young high school graduates have dropped 10.8 percent, and those of young college graduates have dropped 7.7 percent.

Cited sources:

http://trends.collegeboard.org/college-pricing/figures-tables/average-rates-growth-published-charges-decade

http://projectonstudentdebt.org/files/pub/Debt_Facts_and_Sources.pdf

http://www.epi.org/publication/class-of-2014/

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