For Review: CHE Presentation DRAFT 4

Version: October 8, :00 a.m.

Will there be a tsunami?

“…I'd be very surprised if in ten years we don't see hundreds of universities in bankruptcy.”

–Clayton Christensen, 2013

“The business model that has characterized American higher education is at—or even past—its breaking point.”

–Clayton Christensen, 2011

“There’s a tsunami coming.” —John Hennessy, President of Stanford

• 1 in 10 four-year universities facing “acute financial distress”

• Negative outlook for higher ed sector

• “…pricing power nearly exhausted”

Moody’s Outlook

Out-of-control Costs

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0%

20%

40%

60%

80%

100%

120%

Tuition & FeesCollege Textbooks

College Housing

Medical Care

All Items

% CHANGE IN PRICE SINCE 2002 – NATIONWIDE

Bureau of Labor Statistics, Purdue Calculations, GAO

The average student spends$1,200 annually on supplies

Enrollment Declining

Fall 2012 Fall 2013 Fall 201418,900,000.0

19,000,000.0

19,100,000.0

19,200,000.0

19,300,000.0

19,400,000.0

19,500,000.0

19,600,000.0

19,700,000.0

19,800,000.0

19,900,000.0-1.7%

-1.4%

-1.3%

Nat

ion

al E

nro

llm

ent

In M

illi

on

s

Affordability Driving Enrollment

Source: UCLA CIRP, 2014

• A record 46% of freshmen named cost as a very important factor in their school choice.‑ Up from 31% in 2004

• The four main reasons students pass on an admissions offer from their “first-choice school” are all related to affordability.

% Believing A College Education Is “Very Important”

2010

2014

2014

_x00

0d_P

arents

of Pub

lic Sch

ool C

hildren

0%20%40%60%80% 75%

43% 41%

Growing Debt

Average Debt Per Borrower: $33,000

Percent of graduates who borrow: 70%

Total U.S. Student Debt: $1.1 Trillion

% delaying home purchases: 25-40%

• Graduates with no debt who start a business: 26% • Graduates with debt ≥$40,000: 16%

% delaying marriage: 7-14%

55%45%

Graduates are Moving Back Home

Living with family*

*Does not include graduates who own the home or who are listed on the lease

Source: Pew, Richard Fry

Living on their own

% of young business owners cut in half from

2010-13

Impact On Young Entrepreneurs19

89

2010

2013

Share of households under age 30 that own a stake in a private busi-

ness

0%

2%

4%

6%

8%

10%

12% 10.6%

6.1%

3.6%

Representation among U.S. entrepreneurs at an all-time

low

2003

2013

Of all new businesses, % started by someone under 34

10%

16%

22%

28% 26.4%

22.7%

Source: Wall Street Journal

Purdue’s Response

Growing High Value: High Impact Degrees

1. Chemical Engineering2. Aerospace Engineering3. Energy & Extraction Engineering4. Computer Engineering5. Electrical Engineering6. Mechanical Engineering7. Civil Engineering8. Industrial & Manufacturing Engineering9. General Engineering10.Computer Science11.Operations & Logistics12.Construction Services

Source: Brookings/Hamilton 2014

Lifetime Earnings By Major

Named a No. 1 seed in the “Sweet Sixteen of tough graders”

Stuart Rojstaczer, Ph.D., Duke University, GradeInflation.com

National grade inflation per decade: 0.14Purdue in the last 35 years: .09

Committed to Rigor

PurdueArizona StateMIT

PrincetonGeorgia TechCal Tech

Years of math required4

Declining Cost of Attendance2009-15

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15$17,000

$18,000

$19,000

$20,000

$21,000

$22,000

$23,000

$24,000

$25,000

$26,000

IU Bloomington

Purdue WL

Average of Big Ten Public Schools

FY 11-12 FY 12-13 FY 13-14*$0

$25,000,000

$50,000,000

$75,000,000

$100,000,000

$125,000,000

$150,000,000

$175,000,000

$200,000,000

$225,000,000

$250,000,000

Purdue LoansPerkinsPrivatePLUSStafford

$183M

Student Debt

18%$223M

$204M

$40M

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY20140

5

10

15

20

25

Big Ten 5-year average: 6C

om

pan

ies

24

8

11

Record!

Record # Of StartupsViable Startups Commercializing a University Innovation

Augmenting Purdue’s Economic Impact

24

3X

Previous record

DFTxDrug-free pain

therapy

Speak Modalities

Autism therapy via a tablet

device

Bearing Analytics

Wireless monitoring of

bearings

Spero EnergyClean energy

catalyst

Energy Driven TechnologiesNanostructure

surface treatment

Nano-Meta TechnologiesCreation of new nanomaterials

Frontier3D molecular laser printing

SymicTissue Scaffold

Technology

SpeechViveParkinson’s

disease treatment device

BioKorf LLCFlexible &

personalized drug delivery

Neuro VigorPain therapy

Nemo CoNanoscale

transistor modeling

BlueVineEnergy storage

Battle Ground Tech

Electronic device technology

Selected Fy2014 Startups

Higher Education at the Highest Proven Value