1. A Review of Federal Statistics THE EDUCATION SINKHOLE

2. The educational market is inflating far passed wages, leaving a growing number of Americans to invest in federal and private loans for an education which will never meet their return. THESIS

3.  During a 17 year study, tuition rates were found to be increasing between 2.1 and 1.2 times that of inflation. TUITION RATES

4. Percentage of Tuition Increase for 2011  Pittsburgh University: 8.5%  Millersville: 7.5%  Harvard: 3.8% Current Inflation Rate: 3.8% Percentage of Cut State Funding Versus Operating Budget  Harvard: N/A (private)  Millersville: 9%  Pittsburgh: 4%

5. WAGE INFLATION VERSUS TUITION INFLATION

6.  The American wage index percentage of change according to social security is -1.5% for 2009.  Using data supplied by S.S. and Bureau of Labor Statistics:  The median of the wage change from 1990 to 2006 is 4.17%  The median of college tuition is 7.4%  For, at least, the last 16 years, college tuition has been compounding passed American wages. WHAT DOES THIS MEAN?

7. INCREASE IN DEMAND Employment Rates for August  Less Than a High School Diploma  14.3%  High School Diploma  9.6%  Some College  8.2%  Bachelors or Higher  4.3%

8.  Colleges despite their ever increasing cost are growing in demand, for good reason. INCREASE IN DEMAND

10.  “Of the 3.2 million youth age 16 to 24 who graduated from high school between January and October 2010, about 2.2 million (68.1 percent) were enrolled in college in October 2010. The college enrollment rate of recent high school graduates was slightly lower than the record high set in October 2009 (70.1 percent).” – Bureau of Labor Statistics, April 2011  The rate of increase has tripled in the last ten years. INCREASE IN DEMAND

11. FEDERAL LOAN STATISTICS

12.  In 1989, the Default Prevention and Management Initiative set limits on the default rate withdrawing federal funding from non-eligible schools. (Department of Education)  If three cohort default rates are equal to or higher than 25% or the cohort default rate is greater than 40%, the school loses financial aid. FEDERAL LOAN STATISTICS: THE INITIAL DROP

13. Criteria:  In 1998, the number of days of delinquency was expanded from 180 days to 270 days.  The definition of a borrower does not include deferment and forbearance. Calculation:  Since borrows in deferment and forbearance are not consider defaulting, they are placed into the denominator for the ratio calculations.  Loan amounts are also not taken into consideration. THE DEFAULT CRITERIA AND CALCULATIONS ARE FLAWED

14. THE ACTUAL VALUES  The Department of Education using Loan Record Detail Report (LRDR) files, maintaining the two year (270-day) cohort period, and only including borrowers who were defaulting on all their loans calculated the follow figures.

15.  No creditable source of data could be located for private student loans. PRIVATE LOANS

16. 1.College tuition is increasing at a rate beyond the yield of most Americans, and loans are the only alternative. 2.The number of people attending higher education is expanding dramatically. 3.The number of borrows defaulting or in forbearance is entirely unknown. Americans cannot afford the cost of higher education, and the gap is widening. CONCLUSION

17.  U.S. Bureau of Labor Statistics. Web. 15 Sept. 2011. ."University Of Pittsburgh Raises Tuition - Project Economy News Story - WTAE Pittsburgh." Pittsburgh News, Pittsburgh, Pennsylvania News, Weather & Sports - WTAE Pittsburgh's Channel 4. Web. 15 Sept. 2011..  “National Average Wage Index." The United States Social Security Administration. Web. 15 Sept. 2011..  United States. Department of Education. Office of Inspector General. Audit to Determine If Cohort Default Rates Provide Sufficient Information on Defaults in the Title IV Loan Programs. Dec. 2003. Web. 15 Sept. 2011.  "FinAid | Saving for College | Tuition Inflation." FinAid! Financial Aid, College Scholarships and Student Loans. Web. 15 Sept. 2011..  "Graph of National Student Loan Default Rates." U.S. Department of Education. Web. 15 Sept. 2011. http://www2.ed.gov/offices/OSFAP/defaultmanagement/defaultrates.html  National Center for Education Statistics (NCES) Home Page, a Part of the U.S. Department of Education. Web. 17 Sept. 2011.. WORK CITED