1. TASFAA 2016 Legacy of Leadership IS COLLEGE REALLY WORTH IT? Sonja McMullen Director of Business Development Sallie Mae

2. TASFAA 2016 Legacy of Leadership AGENDA Value-Added College Earnings Advantage Benefits vs. Costs Education, Earnings and Unemployment Arguments For and Against College Conclusion

3. TASFAA 2016 Legacy of Leadership OUR RESEARCH Brookings Institution: Beyond College Rankings – “The Value Added Approach to Assessing 2 Year and 4 Year Schools 2015” Federal Reserve Bank of New York: Current Issues in Economics and Finance “Do the Benefits of College Still Outweigh the Costs?” ProCon.Org: “Is a College Education Worth It?” CNBC.Com: “In Spite of the Cost, Is College Worth It?”

4. How Value-Added is Calculated Brookings: Beyond College Rankings - The Value Added Approach to Assessing 2 Year and 4 Year Schools 2015

5. Overview of Brookings’ Report “Beyond College Rankings” Typical bachelor’s degree holders earn $580,000 more and associate’s degree holders earn $245,000 more over their careers Brookings: Beyond College Rankings - The Value Added Approach to Assessing 2 Year and 4 Year Schools 2015

6. TASFAA 2016 Legacy of Leadership Federal Reserve Bank of New York: Current Issues in Economics and Finance “Do the Benefits of College Still Outweigh the Costs?”

7. The average college graduate earns enough “extra” to recover the cost of attending most colleges in fewer than 15 years Over the past 40 years, the college earnings premium has averaged about $20,300 per year During the recession, college graduates faced unemployment rates about half as high as those for high school graduates Source: Federal Reserve Bank of New York: Current Issues in Economics and Finance “Do the Benefits of College Still Outweigh the Costs” Overview of findings – Federal Reserve Bank of New York

8. College Earnings Advantage Average Annual Wages by Education (1970 to 2013) Over the past four decades, those with a bachelor’s degree have tended to earn 56 percent more than high school graduates while those with an associate’s degree have tended to earn 21 percent more than high school graduates Federal Reserve Bank Current Issues in Economics and Finance “Do the Benefits of College Still Outweigh the Costs?”

9. Average Annual Wages Compared to Opportunity Cost of Not Attending College Over the 4 year period that is typically required to earn a bachelor’s degree, a student would have paid $26,000 in tuition and would have forgone nearly $96,000 in wages.  The total economic cost of a bachelor’s degree was $122,000. Despite entering the work force at a later age though, workers with a bachelor’s degree earn over $1 million more than high school graduates during their working lives Federal Reserve – Do the Benefits of College Still Outweigh the Costs?

10. Will the Benefits Cover the Costs? Subtracting the costs from benefits yields a net return on college of over $420,000 Students paying $9,000 in annual college tuition for four years can break even and begin earning additional returns in nine years When tuition reaches $45,000 per year, which covers nearly all public colleges, the costs can be recouped in 17 years - For those who graduated at age 22, the investment is paid in full before age 40 Federal Reserve Bank Current Issues in Economics and Finance “Do the Benefits of College Still Outweigh the Costs?”

11. TASFAA 2016 Legacy of Leadership Is a College Degree Really Necessary? No matter where a person starts, going to college increases the chances of moving up the economic ladder Graduates from the bottom 20 percent are over six times as likely to reach the top than those who don’t go to college The impact is also striking for those born into the second lowest 20 percent; their chances of getting to the top are five times higher with a college degree

12. TASFAA 2016 Legacy of Leadership ProCon.Org: “Is a College Education Worth It?”

13. Correlation Between Education, Earnings and Unemployment College graduates have more and better employment opportunities College graduates are more likely to have health insurance and retirement plans 70% of college graduates had access to employer provided health insurance compared to 50% of high school graduates in 2008 ProCon.Org: Is a College Education Worth It?

14. 14 College graduates make more money On average, a college graduate with a bachelor’s degree earned $30,000 more per year than a high school graduate, or about $500,000 more over a lifetime, as of April 2013. Earning an associate's degree (a 2-year degree) was worth about $170,000 more than a high school diploma over a lifetime in 2011. The median income for families headed by a bachelor's degree holder was $100,096 in 2011—more than double what a family headed by a high school graduate would earn More and more jobs require degrees Approximately 63% of jobs will require some college education or a degree ProCon.Org: Is a College Education Worth It? Arguments for College

15. 15 Colleges allow students to explore career options 80% of college students complete internships before graduation, giving them valuable employment experience before entering the job market College education has a high return as an investment Return of 15% per year as an investment, larger than the stock market 86% of colleges graduates believe college was a good investment College exposes students to diverse people and ideas The community of people on a college campus means students are likely to make diverse friends and business connections, and, potentially, find a spouse or a mate. Arguments for College ProCon.Org: Is a College Education Worth It?

16. 16 Arguments Against College Student loan debt often forces college graduates to live with their parents and delay marriage, financial independence, and other adult milestones – In 2013, student loan borrowers delayed retirement saving (41%), car purchases (40%), home purchases (29%), and marriage (15%) – Less than 50% of women and 30% of men passed the "transition to adulthood" milestones by age 30 – In 1960, 77% of women and 65% of men completed these milestones by age 30 ProCon.Org: Is a College Education Worth it?

17. 17 Arguments Against College Many recent college graduates are ‘un’ or ‘under’ employed – The unemployment rate for recent college graduates was 8.8% in February 2013, down from 10.4% in 2010, but up from 5.7% in 2007 – According to the Federal Reserve Bank of New York, 44% of recent college graduates were underemployed in 2012. Many people succeed without college degrees – According to the Bureau of Labor Statistics, of the 30 projected fastest growing jobs between 2010 and 2020, five do not require a high school diploma, nine require a high school diploma, four require an associate's degree, six require a bachelor's degree, and six require graduate degrees. ProCon.Org: Is a College Education Worth It?

18. 18 Arguments Against College Tuition has risen quicker than income, making it difficult for the average American to pay for college without incurring debt – The average cost for a 4-year degree (including room and board) increased 130% for private schools and 131.4% for public schools from fall 1982 to fall 2012, while median family income increased 10.9% The total cost of going to college also includes the cost of missing opportunities to make money at a job – The total cost of going to college means more than tuition, fees, and books; it also includes an opportunity cost which equals at least four years of missed wages and advancements from a full- time job-- about $49,000 for a 4-year degree and $20,000 for a 2- year degree. ProCon.Org: Is a College Education Worth It?

19. TASFAA 2016 Legacy of Leadership CNBC.COM: “In Spite of Cost, Is College Worth It?”

20. 20 In Spite of Cost, is College Worth it? CNBC Report of February 2015 Having a degree—especially in a tough economic environment— certainly makes a difference to employment and lifetime earnings prospects, experts say. Research from the Bureau of Labor Statistics shows a high correlation between joblessness and earnings, and those with less than an associate's degree fare worse on average than workers with post-graduate credentials. However, Gallup recently partnered with Purdue to survey more than 30,000 college graduates across the country. The 2014 study arrived at a common conclusion: the name of a college or university has little to no influence on a graduate's job prospects. CNBC.com

21. 21 In Spite of Cost, is College Worth It? An advanced degree could earn a worker as much as $2 million more over their lifetime than someone with a high school diploma, according to Georgetown Even having limited post-secondary education without having a formal degree can add as much as $250,000 to lifetime earnings 71 percent of recent grads that are now working full time accredit their success to internships or job experiences while in college According to Gallup's findings, where a student went to school "hardly matters at all to their current well-being, and their work lives in comparison to their experiences in college," the report said. "When it comes to finding the secret to success, it's not 'where you go,' it's 'how you do it' that makes all the difference in higher education." CNBC.com

22. TASFAA 2016 Legacy of Leadership CONCLUSION FROM INDEPENDENT STUDIES

23. 23 Conclusion from Independent Studies While all of the studies provide different talking points, the conclusion is the same in that the benefits of a college degree outweigh the costs – College graduates tend to earn more annually than their high school counterparts – Even with the increase in tuition, the payment to income ratio has remained relatively flat over the past few years 3 of the 4 sources were conducted by Federal entities, whereas the third source was conducted by an independent, nonpartisan entity.

24. TASFAA 2016 Legacy of Leadership QUESTIONS?