The tuition at our nation’s colleges are rising faster than inflation, medical costs, and importantly: the income of 99% of Americans. Four years at a private university now costs as much as a new Ferrari sports car, and a student from a public university can expect to graduate with $25,000 or more in student debt. But, did you ever wonder where all that money is going?

Higher Education Tuition Breakdown


Original Source:

50 BILLION PROFIT Off Of Students

monopoly-manCollege Debt Crisis

“…the most profitable in the country”

I’ve written extensively about the high-cost of a 4-year college and whether high school educators are doing a DISservice to students in pushing them to a 4-year college– at any cost.

It’s NOT like it was in the old days when students could go to school and work a job to pay tuition. Tuition escalation is just too great to overcome. With the high rate of college graduate unemployment, and even higher UNDER-employment rates, an “educated” and rational person really has to wonder if the cost is worth the return and investigate other options.

Today’s USA Today article: Government projects to make $50B in student loan profit, highlights one of the problems as the United States government stands to PROFIT MORE than ExxonMobil, Apple, J.P. Morgan, or Fannie Mae.

According to the Congressional Budget Office’s latest projections, the federal government projects a record $50-billion profit on student loans this year. ExxonMobil made $44.9 billion in 2012, according to published reports, making it the most profitable company in the country. And if Congress doesn’t stop rates on some loans from doubling on July 1, that profit will rise more, up to an additional $21 billion, a recent report found. However, there are those who claim the projections don’t accurately reflect risk taken by the government and the profits are much smaller.

College Debt vs Student Loan Profits

IF a college-educated populace is a good thing for our society, nation, and humankind in general, why are the barriers so great?

The record-high profits on student loans come during a time of historically low interest rates on home mortgages and car loans. While a home buyer can get a 30-year mortgage at about 4.5% interest, the federal government is charging as much as 6.8% interest on unsubsidized student loans and is less than a month away from automatically doubling the interest rate on the loans headed to poor students unless Congress takes action.

“Because the government has almost ensured anyone who applies will get the loan they need, schools have been able to drive prices up with no concern as to where funding will come from,” Whaley said. “With prices skyrocketing, students are taking on way more debt than they can handle but have no other option to compete in the modern economy.”

Read the rest of the article here and please provide your views on college and how to battle rising costs in the comment section.


My other blog posts on College Debt.


Choosing the Right HigherEd Degree Infographic


Choosing the Right Degree

What matters most when choosing a graduate degree? Money? Doing something you love? The journey to finding the right master’s degree can be a long one.

What Do You Want?

– Consider these options when choosing a graduate school:

  • Location
  • Quality of life
  • Degree programs offered
  • Cost
  • Time
  • Resources
  • Faculty
  • On-campus or online
  • Ranking
  • Accreditation

“Love what you do and do what you love.” – Ray Bradbury, author

What Do You Like?

– Think about the things in your life that excite you. There may well be a master’s degree option that allows you to truly do what you love.

The Realistic Path

– If you like to…

  • Do things with your hands
  • Be outside
  • Work with real-world materials
  • Work solo

– Consider these fields: farmer/rancher, surveyor, forester, mechanical drafter, technician, firefighter, correctional officer, animal control worker, chef, landscaping, carpenter, explosive worker, machine operator, repairer, machinist, agricultural inspector, animal breeder, jeweler, precious-metals worker, pilot
– Possible degree
– Oregon State University
– Master of Forestry
– Average graduate tuition
– Resident: $13,188
– Non-resident: $21,219

The Investigative Path

– If you like to…

  • Do an extensive amount of thinking
  • Mentally search for facts and figures

– Consider these fields: coroner, computer and information scientist, engineer, animal scientist, biologist, physicist, chemist, economist, anthropologist, archeologist, geographer, historian, political scientist, astronomer, sociologist, dentist, nutritionist, veterinarian, detective
– Possible degree
– University of Colorado-Denver
– Master of Science in Chemistry
– Average graduate tuition
– Resident: $5,087
– Non-resident: $15,619

The Artistic Path

– If you like to…

  • Work with form, design and pattern
  • Express yourself
  • Not follow a clear set of rules

– Consider these fields: architect, art director, fine artist, animator, fashion designer, actor, dancer, musician, graphic designer, interior designer, creative writer, film editor, makeup artist, choreographer
– Possible degree
– Parsons The New School for Design, New York City
– Master of Fashion Studies
– Average graduate tuition
– $20,855

The Social Path

– If you like to…

  • Work with, communicate and teach people
  • Help others

– Consider these fields: social worker, probation officer, counselor, health educator, clergy, teacher, nurse, physical therapist, athletic trainer, speech-language pathologist, child care worker
– Possible degree
– Loyola University (Illinois)
– Master of Social Work
– Average graduate tuition
– $13,950

The Enterprising Path

– If you like to…

  • Start and carry out projects
  • Make many decisions
  • Take risks
  • Deal with business

– Consider these fields: chief executive, general manager, legislator, manager, education administrator, funeral director, logisticians, producer, program director, copy writer, head cook, special agent, PR specialist, insurance agent, product promoter, ship captain
– Possible degree
– Central Michigan University
– Master of Science in Administration
– Average graduate tuition
– $7,305

The Conventional Path

– If you like to…

  • Follow set procedures and routines
  • Work with data and details
  • Follow authority

– Consider these fields: treasurer, controller, insurance adjuster, accountant, auditor, financial analyst, loan officer, tax preparer, database administrator, librarian, medical transcriptionist, proofreader, inspector
– Possible degree
– William & Mary, Williamsburg, Va.
– Master of Accounting
– Average graduate tuition
– Resident: $29,610
– Non-resident: $40,010

Know Your Financial Aid Options

– To be sure, financing a graduate degree can be an expensive proposition. But consider the various types of financial aid available.

  • Scholarships
  • Grants
  • Veteran’s education benefits
  • Loans
  • Employer-based aid
  • Teaching and research assistantships

It’s About Getting a Job, Right?

Top graduate degrees for pay and career growth through 2020:

Mid-career pay Projected growth by 2020

– 1. Physician assistant studies $97,000 30%
– 2. Computer science $109,000 22.3%
– 3. Electrical engineering $121,000 17.7%
– 4. Mathematics (tie) $91,000 24.7%
– 4. Information systems (tie) $95,500 23.3%
– 6. Physics $114,000 20.3%
– 7. Occupational therapy $79,200 33%
– 8. Healthcare administration $87,800 22%
– 9. Nursing $85,900 21.7%
– 10. Economics $115,000 14.3%

Time an Issue? Consider Online

Top online graduate schools:

  • Washington State University 
    Cost: $509 per credit
    Top programs: Business and engineering
  • Duke University – Fuqua School of Business 
    Cost: $6,381per year
    Top programs: MBA, executive MBA
  • St. John’s University 
    Cost: $35,520 per year
    Top programs: Law, education
  • Carnegie Mellon University 
    Cost: $453-$540 per credit hour
    Top programs: Engineering, business, computer science
  • Stanford University
    Cost: $890 per credit hour
    Top programs: Law, engineering, medicine
  • Columbia University
    Cost: $628 per credit hour
    Top programs: Engineering, computer information technology
  • Penn State University
    Cost: $8,222 per year, in-state
    Top programs: Clinical psychology, engineering, education
  • Arizona State University
    Cost: $463 per credit hour
    Top programs: Engineering, education
  • Central Michigan University
    Cost: $477 per credit hour
    Top programs: Business, education
  • Georgia Institute of Technology
    Cost: $1,100 per credit hour
    Top programs: Production/operations, supply chain/logistics, chemical engineering, civil engineering, physics


student-loan-graphic-bigOn JULY 1st, 2013, the interest rate on new Federally subsidized Student Loans will DOUBLE  from 3.4% to 6.8%

The Federal Government currently makes 36 cents in PROFIT from every dollar they loan a student for education.

Bank On Student Loan Fairness Act

I’ve written extensively on the dangers and my concern for the over a  TRILLION dollars in College Loan Student Debt. (here, here,  here, and HERE)

The cost of higher education has grown far more rapidly than median family income, leaving students with little choice but to take out loans which, upon graduating into a labor market with limited job opportunities, they may not have the funds to repay.
Economic Policy Institute

Student Loan Debt by the Numbers

  • $1.1 TRILLION : Approximate amount of outstanding student loan debt—second only to mortgages in household debt.
  • 60% of the $1 Trillion is owed by Americans OVER the age of 30.
  • 37 Million people have outstanding student loans.
  • 1-in-5: U.S. households that have student loans.
  • $26,682: Average outstanding balance for a borrower with student debt.
  • 1-in-8: Share of borrowers with more than $50,000 in student debt.
  • 40 % : Share of American households headed by someone under 35 that have student loan debt.
  • 25 % : Share of borrowers under age 30 that spend more than 10 percent of their income on student
  • loan payments.
  • 30 % : Share of borrowers in repayment that are delinquent on a student loan.
  • 6.7 Million: Number of borrowers who are more than 90 days delinquent on a student loan.
  • 9.1% : The number of people who defaulted on their loans in 2012
  • 31 %: Percentage increase in the number of student loan borrowers between 2007 and 2012.

 Bank on Student Loan Fairness Act

In the video below, Sen. Elizabeth Warren (D-MA) introduces the Bank on Students Loan Fairness Act on the floor of the Senate. [Fact Sheet]

“Some people say that we can’t afford to help our kids through school by keeping student loan interest rates low,” said Senator Warren. “But right now, as I speak, the federal government offers far lower interest rates on loans, every single day–they just don’t do it for everyone. Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75%. But this summer a student who is trying to get a loan to go to college will pay almost 7%. In other words, the federal government is going to charge students interest rates that are nine times higher than the rates for the biggest banks–the same banks that destroyed millions of jobs and nearly broke this economy. That isn’t right. And that is why I’m introducing legislation today to give students the same deal that we give to the big banks.”
“Big banks get a great deal when they borrow money from the Fed,” Senator Warren continued. “In effect, the American taxpayer is investing in those banks. We should make the same kind of investment in our young people who are trying to get an education. Lend them the money and make them to pay it back, but give our kids a break on the interest they pay. Let’s Bank on Students” Unlike the big banks, students don’t have armies of lobbyists and lawyers. They have only their voices. And they call on us to do what is right.”


0% Chance of Passing?

Megan McArdle (@asymmetricinfo), special correspondent for Newsweek, writes:

Of course, this isn’t really a serious proposal, in the sense that it has any chance of getting passed. Elizabeth Warren is a very smart woman who knows how the financial system works; she’s very well aware of why student loans are expensive relative to the Fed’s discount window. And I presume that she is aware that the CBO will score her bill as costing rather a lot of money.

But passing this bill probably isn’t the point. Rather, it’s a populist values statement: we like students, we don’t like banks. As such, it’s probably going to be quite effective. But only among people who don’t know much about the banking system.

And sadly, she’s probably right.

Students and education are always paraded around when it’s convenient, but while education and education funding is in trouble, banks are getting bailouts and bankers are raking in record salaries.

Already we have Student Loan Fairness Act (H.R. 1330) introduced on March 21, 2013.

The Student Loan Fairness Act would create a new “10-10” standard for student loan repayment, in which an individual would be required to make ten years of payments at 10% of their discretionary income, after which, their remaining student loan debt would be forgiven.

However, according to it has a Prognosis of  “1% chance of getting past committee and 0% chance of being enacted.”


Is it Time to Re-Think College or Banks?

When 53% of graduates are UN-employed or UNDER-employed, and students continue to face an increasingly dim future, it’s time to re-think college. And many already are, as college enrollments fell this past fall.

As public anger over college costs continue, and legislators in some states get to work on their budgets, more colleges and universities are promising to freeze or cut tuition—in many cases, on the condition that they receive more taxpayer funding. Hechinger Report

The most pressing issue may be why college tuition is so high with increases nearly 500% in the past decade. But, one thing that can be done right now, and must be communicated prior to July, is to reduce the interest on student loans.

With federally subsidized, student loan interest rates scheduled to DOUBLE on July1st,  it’s time to get involved.
Spread the word. Contact your legislative representatives and let them know AFFORDABLE college is important to our country.



12 Disturbing Facts about the over a TRILLION Dollars in Student Loan Debt. Is this the next financial crisis as tuition is up nearly 500% in the past decade?

Student Loan Debt by the Numbers

  • $1.1 TRILLION : Approximate amount of outstanding student loan debt—second only to mortgages in household debt.
  • 60% of the $1 Trillion is owed by Americans OVER the age of 30.
  • 37 Million people have outstanding student loans.
  • 1-in-5: U.S. households that have student loans.
  • $26,682: Average outstanding balance for a borrower with student debt.
  • 1-in-8: Share of borrowers with more than $50,000 in student debt.
  • 40 % : Share of American households headed by someone under 35 that have student loan debt.
  • 25 % : Share of borrowers under age 30 that spend more than 10 percent of their income on student loan payments.
  • 30 % : Share of borrowers in repayment that are delinquent on a student loan.
  • 6.7 Million: Number of borrowers who are more than 90 days delinquent on a student loan.
  • 9.1% : The number of people who defaulted on their loans in 2012
  • 31 %: Percentage increase in the number of student loan borrowers between 2007 and 2012.


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minerva-logo-from-kevin-corbettI remember many years ago, the Arizona State University complained about students enrolling in their college but never going to class because they’d stay in their dorm rooms and take online courses.

At the time, ASU had to reflect on whether this was something that was good or not. Fast forward several years later and it’s a issue more colleges are wrestling with, given the explosion in online learning.

Well, it looks like there might be some genius in a new project then, in getting students together for an online college education, living in dorms together EXCEPT….it’s MINUS the college buildings and campus!

This resonates with me personally for reasons I’ll explain below, but first let me explain a bit more about the new  Minerva Project

QUICK NOTES on Minerva

  • Name: Minerva, after the Roman Goddess of Wisdom
  • Opens: Fall 2015
  • Funding: $25 Million (so far)
  • On Board:
    • Ben Nelson (founder) [article]
      Former CEO of Snapfish
    • Stephen Kosslyn  (founder) [article]
      Director of the Center for Advanced Study in Behavioral Sciences at Stanford University and a former dean and chair of the psychology department at Harvard, recently joined as the founding dean.
    • Larry Summers
      Former US Treasury Secretary
      Former Harvard University President
    • Bob Kerry
      Former Senator from Nebraska
      Former President of New School in New York
    • Annual Half Million Dollar Award for Teaching
    • Lure Scientists with a “smaller bite” out of their research grants for overhead and allow professors to retain full ownership of all their intellectual property and discoveries.
    • Attract New Phd’s with short term contracts, autonomy over course content, and flexibility in their teaching location (since there’s no physical campus).
    • A new online learning model
    • Students socialize and learn together in college classes without a geographically fixed campus.
    • SMALL seminars (25 students per class) . VERY DIFFERENT versus the now popular MOOC
    • College Travel (6 countries in four years)
    • College Dorms (in foreign countries)
    • Language immersion
    • Cheaper

Why I Think This Will Take Off

I’m going to provide four reasons why I think Minerva could be successful.

First, my youngest daughter went to college five years ago and she selected her college based on the opportunities the college offered to travel abroad. She spent a semester at the Beijing Foreign Studies University and it was a life-changing experience for her. She graduated with a degree in International Business and another in Chinese and is currently living in China. When I visited with her in Beijing last month, half of the students from her program had returned to China.  Schools now spend a lot of time teaching about a global communities, it only makes sense that there is a now a generation of students wanting to explore the opportunities and experiences to be had in other countries, like Minerva is promoting.

Second, during any visits to her University in the United States, the administration continually boasted about their oversees efforts to recruit foreign students to their University for an “American college education experience”. This is something I hear from every college and university administrator now.

Last month, while presenting at a Superintendents’ Regional conference, one of the senior faculty expressed concerns about all the new construction in light of a historical first dip in four-year college enrollment.

And only recently, when talking to a student resident contractor in Oregon, they told me 25% of all their housing is for foreign students.

Locally, at the University of Washington, they’ve welcomed more oversees students and embraced the higher out-of-state tuition they pay (allegedly in deference to local students).

If Minerva can attract the foreign students they’re looking to capture, and provide for greater experiences at a reduced cost, it seems only natural to me that the program would be popular with a foreign audience as well.

Third, there are still students who want  (and parents willing to go in debt for…choke) the “college experience” and Minerva may provide the best college experience for its students: living and learning together in metropolitan cities around the world without being tied to a singular geographical location and its associated high tuition. I’m sure there are those who would argue about the tradition and identity to be shared with a city or campus but, I’d suggest that the “anywhere, anytime, anyplace, any pace” that online learning pundits promote, makes this next step a natural extension where buildings are no longer the thing to be identified with when trumped by greater relationships, experiences, and learning.  Frankly, I’m amazed at the amount of construction on college campuses whose administrators pound their chests extolling the value of new facilities, when tuition rates are blasting through the stratosphere.
[Note: Kaplan’s Andrew Rosen writes about this in his book: Change.EDU:Rebooting for the New Talent Economy]

Lastly and simply: Cost.  Minerva is going to challenge the strength of the traditional institutions’ “branding” –a group who only recently jumped on-board in acceptance of online learning with MOOCS (but don’t yet have a business model) AND are still beyond the financial reach for a good majority of Americans.

I’ve written about this in recent posts (College Grads: The New Debt Slaves  and  Colleges Suing Their Own Students For Repayment, and Department of Education SWAT Team) as the amount of college debt skyrockets over a TRILLION dollars. Compound the debt with record levels of both unemployment and under-employment for college grads and one might wonder if pushing a 4-year college on a high school graduate is the right thing to do.

Economically, if Minerva doesn’t have the overhead associated with buildings and campus maintenance, and is able to provide the high-level instruction they’re working to attract, all while providing a world class learning experience, I believe they could be a fantastic option for students wanting a different kind of college experience.

An option I think will only become more of the norm.


As always, I’d love to hear your thoughts/comments– thank you!