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Risk Increases for Students at the University Risk Still Moderate at the Community College
Chuck Vawter III
Preliminary figures show that Arizona State University (ASU) enrollment stands at a record 73,373 for the Fall 2012 semester.
Arizona State University - Fall Headcount
2005 2006 2007 2008 2009 2010 2011 2012
61,033 63,278 64,394 67,082 68,064 70,440 72,254 73,373
% Chg 3.7% 1.8% 4.2% 1.5% 3.5% 2.6% 1.5%
A portion of that boost in enrollment has been provided by new transfers.
ASU Undergraduate New Transfers - Fall Headcount
2005 2006 2007 2008 2009 2010 2011 2012
5,395 5,063 4,910 5,446 5,388 6,158 6,776 Unavail
% Chg -6.2% -3.0% 10.9% -1.1% 14.3% 10.0%
The surge in enrollment that began at the Maricopa County Community College District (MCCCD) in 2009 has started to push students through the academic pipeline to ASU. For Fall 2010 and 2011, the only data publicly available, MCCCD provided between 50% and 60% of the above transfers. One place enrollment growth has not come from is the Freshman class. During Fall 2011, there were less Freshman than Fall 2006.
ASU Freshmen - Fall Headcount
2005 2006 2007 2008 2009 2010 2011 2012
9,619 10,372 10,707 11,000 10,256 10,373 9,850 Unavail
% Chg 7.8% 3.2% 2.7% -6.8% 1.1% -5.0%
International student enrollment also hit record levels during the current semester - more than 5,160 total - up from 3,856 just two years ago, a 34 percent increase. Although not available for public consumption, the author wonders how many of those international students are freshman (the above table could be painted worse). Escalating tuition has been a deterrent to many starting at ASU.
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Arizona State University
Fall Semester Incoming Resident Undergraduate Tuition and Fees
2005 2006 2007 2008 2009 2010 2011 2012
2,204 2,345 2,486 2,832 3,423 4,067 4,860 4,862
% Chg 6.4% 6.0% 13.9% 20.9% 18.8% 19.5% 0.0%
Seven Year Increase 120.6%
The only increase, during the current semester, was an additional $2 that each full-time student pays to the Financial Aid Trust - now totaling $41. The sharp rise in ASU's tuition, and a punk labor market, provided a strong boost to Maricopa County Community College District's (MCCCD) enrollment - as measured by Full-Time Student Equivalents (FTSE).
As each of those students applied to the community colleges, they were asked a simple question: Why are you taking classes at MCCCD?
MCCCD Student Survey
Educational Intent
Fall Semester
2006 2007 2008 2009 2010 2011
Workforce 29% 29% 33% 38% 40% 42%
Transfer to college/university 46% 48% 45% 41% 39% 38%
Personal interest 9% 8% 14% 17% 18% 18%
Undeclared 16% 15% 8% 4% 3% 2%
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Currently, at least 80% of the District's students are taking classes in preparation for
employment. As the author reads it, the workforce category desires work in the near
term, the transfer group is willing to wait until the intermediate term but still desires
employment at graduation.
It is not surprising, given the current state of the economy, that more students are trying
to go from community college to the workforce - although the earlier years may have
been higher due to a larger group labeled "undeclared." It is somewhat surprising that a
lower percent of students are looking to transfer - and that trend may be understated
due to the earlier group of undeclared.
Those 80%, that desire employment, might like the following question answered:
How challenging will it be to find a job when I finish my education? The latest employment report was released on Friday, September 7, 2012. That report showed 96,000 new jobs created in August.
One financial commentator summed it up this way:
According to the US Bureau of Labor Statistics (BLS), 28,300 of the 96,000 jobs or 29% are waitresses and bartenders. Health care and social services, primarily ambulatory health care services and home health care services, provided 21,700 jobs or 22.6% of the jobs. So, 52% of the new jobs created by the American superpower are lowly paid waitresses, bartenders, practical nurses, and hospital orderlies.
Another analyst chimed in with the following: Looking at the data, we find that 28,000 jobs were created in the bar and restaurant business. Those are not exactly high-paying jobs. My anecdotal observation is that more than a few college graduates are taking those jobs. Looking back, beyond more than the past month, how weak is the labor market? The first chart spans from January 1948 through August 2012 and reflects the average
length of time, in weeks, that an unemployed individual takes to find a job.
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The current count is 39.2 weeks (in 2008, it was approximately 17 weeks). The next graph views the percent of men with a job relative to all working age males.
The current level, of 64%, is hovering near all-time lows (yes, women entering the workforce has had an influence).
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The final graph shows total individuals employed relative to working age population.
The reader would need to look before 1984 to find a level lower than 59% (the current measure is 58.3%). These are nationwide statistics. Data will vary by geographic location. The economic downturn that began in 2008 has sparked a surge in college enrollment. Unable to find work, the individual reasons that higher education will be the path to a job and prosperity. The grey shaded areas in each of the preceding labor graphs reflect recessions - the most recent, circa 2008. The following graph shows a close-up of the fall and recovery of the job market over the past 48 months.
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The reason why the previous graphs showed a decline in the percent of those employed is because population growth is outrunning employment growth. During the first decade of this millennium, population in this country grew at the rate of approximately 2.7 million per year. The good news is that some of the jobs lost with the recession have been replaced. But here's the all important question for job seekers (and college students/graduates): What kind of jobs were lost, during the recession, and what kind of jobs have been created since?
On August 30, 2012, the New York Times carried an article entitled "Majority of New Jobs Pay Low Wages, Study Finds." Here are a few excerpts from that article:
While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project. The report looked at 366 occupations tracked by the Labor Department and clumped them into three equal groups by wage, with each representing a third of American employment in 2008.
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Lower-wage occupations, with median hourly wages of $7.69 to $13.83, accounted for 21 percent of job losses during the retraction.
From that report is the following graph (which has been edited, by the author, into two parts to aid in its comprehension):
Only 21%, not a proportionate 33%, of the jobs lost during the recession were lower-wage occupations.
If we had to lose jobs, why couldn't we lose more of the lower paying ones? The biggest loser was mid-wage jobs.
In a balanced world, jobs would be lost equally from each of the three tiers: lower-, mid- and higher-wage categories. As jobs were added back, they would likewise be created uniformly.
Since employment started expanding, they (low wage jobs) have accounted for 58 percent of all job growth.
The occupations with the fastest growth were retail sales (at a median wage of $10.97 an hour) and food preparation workers ($9.04 an hour). Each category has grown by more than 300,000 workers since June 2009.
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To emphasize (and repeat):
A majority, 58%, of the jobs created since we hit bottom are lower-wage jobs (not the kind that an individual desires after investing the time and money in obtaining higher education).
If the economy can't create college level jobs, can we rely on job openings from retirements?
80 is the new 65
On November 16, 2011, a story was covered by most of the online and print media. It
centered around a survey Wells Fargo had conducted concerning retirement. Most of
the stories carried a headline to the effect "80 is the new 65." Following are excerpts
from two of those stories (underlining added for emphasis).
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From CNN Money:
A quarter of middle-class Americans are now so pessimistic about their savings
that they are planning to delay retirement until they are at least 80 years old - two
years longer than the average person is expected to live.
Three-fourths of middle-class Americans expect to work throughout retirement.
And this includes the 25% of Americans who say they will "need to work until at
least 80" before being able to retire comfortably.
"The fact that the vast majority of middle-class Americans expect to work well
past the traditional retirement age has significant societal and economic
implications," said Joe Ready, director of Wells Fargo Institutional Retirement
and Trust. "Will people be physically and mentally able to work later in life?
What will it mean for young people entering the workforce?"
From the LA Times:
... pessimism may be a sign of the times. A new survey by Yahoo Finance found
that 41% of people aged 18 to 64 feel the American Dream is "out of reach." The
poll found that 37% of people have no retirement savings, and more than half of
them have socked away nothing for their children's college educations.
Individuals choosing/forced to work longer in life will pose an impediment to college
graduates entering the workplace.
One of, if not the, preeminent sources for retirement data is the Employee Benefit Research Institute. The following is their handiwork.
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In 2002, 50% had total savings and investments less than $25,000. In their most recent survey, conducted this year, that percent has grown to 60% (and 2012's dollar won't go as far as 2002's). On Thursday, September 13, 2012, the Federal Reserve extended its low-interest rate policy into 2015 (in an attempt to revive an ailing labor market). Here's how one analyst viewed that action: Left out of the party once again are bank savers and U.S. retirees who live on fixed incomes, who once again lose out in the game of monetary musical chairs as low rates eat into their income -- just as they're paying more for critical commodities such as oil, gas, and groceries. Robert Robb, in a September 18, 2012 opinion piece for the Arizona Republic, summed it up more succinctly: In a healthy economy, small savers are rewarded, not screwed. For the year that ended June 30, 2012, the Bureau of Labor Statistics pegged inflation at 2.2% in the West urban area. Preliminary estimates place investment returns at 1.3%, for the Arizona State Retirement System (ASRS), during that same time period (see the Sources file for an interesting ASRS stat).
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If an individual, near retirement, has the same experiences with inflation and investments as those two measures, they are in worse shape this June 30th than they were a year ago. Simply stated, they have lost purchasing power by their investments (1.3% gain) failing to keep up with inflation (2.2%). Yes, retirement is being delayed. And, this will be of no assistance to current students. Nevertheless, students are undeterred, at the present time - hoping that matters change later. Students stand ready to undertake increasing amounts of debt to further their education (current total of student loans over $1 trillion). On September 8, 2012, the New York Times carried an article titled "Debt Collectors Cashing In on Student Loans." Following are a few passages from that article: There is no statute of limitations on collecting federally guaranteed student loans, unlike credit cards and mortgages, and Congress has made it difficult for borrowers to wipe out the debt through bankruptcy. “You are going to pay it, or you are going to die with it,” said John Ulzheimer, president of consumer education at SmartCredit.com, a credit monitoring service. Borrowers are most often declared in default when they cannot be found. That is when the collection agencies take over. At ConServe, in a room of cubicles with college pennants lining the walls, collectors comb through databases and public records hunting for contact information for borrowers. If ConServe reaches a borrower who refuses to cooperate, the company considers garnisheeing wages or withholding a government check, which requires approval from the Department of Education.
In fiscal 2011, the department wrote off less than 1 percent of its loan balance, for such things as death or disability of a borrower.
“We never throw anything away,” Dwight Vigna, director of the department’s default division, said.
Lindsay Franke, who is 28 and has a master’s degree in business administration from Albertus Magnus College, said the program had not changed a crushing reality: she still owes too much money and makes too little to pay it off. A marketing coordinator for a law firm, she filed for bankruptcy last year because she could not afford her mortgage, car payment and student loans. She lost the house, but still owes $115,000 in student loans, both private and federal. Under income-based repayment, she pays $325 a month on her federal loans; she also pays $250 a month on her private loans.
“I will never have my head above water,” Ms. Franke said.
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In a similar light, CNN Money has assembled a gallery of five individuals and their plight with student debt. The common thread, with these individuals, is that each of them is over 50 years of age. CNN may have chosen to highlight only five individuals, but their subtitle speaks volumes (underlining added for emphasis):
More than 7 million people over age 50 are still paying off student loans,
according to the New York Federal Reserve.
The first individual accentuates a point made earlier: "I can't prepare for retirement." (She's 51.) To add some color to the situation, the author turns to an individual capable of doing just that - the inimitable Mark Cuban (underlining added for emphasis):
IMHO, the biggest problem the economy has is the enormous student debt new college grads and those leaving college find themselves with. In the past leaving college meant getting a job and getting a used car and/or an apartment with some friends. Yes there was student debt, but it wasn’t anywhere near your car payment. You could still afford the car and the apartment. Now it's the exact opposite. Today, the minute you graduate college you face the challenge of debt against a college education whose value is immediately “underwater”
As a result spending habits have changed dramatically. Now when you leave school you move back home. You take public transportation or borrow your parents car. The only thing new you buy is the cheap work outfit you need. Savings? Forgettaboutit. It’s not happening. Your entire focus is on hitting your monthly nut for school debt , credit card and maybe a car or apartment. The crush of college debt has taken an entire generation of graduates, current and future out of the economy. Which is exactly why the economy hasn’t grown and won’t grow beyond microscopic growth rates we have seen so far.
At some point, he thinks there will be a meltdown in college education.
So far, the author has looked at the trend in jobs last month, before and after the recession began around 2008 (and previous to that, in some graphs). An important question to ask is: What will the job situation be looking forward? The Bureau of Labor Statistics (BLS) has projected the occupations with the largest job growth during the current decade. On the next page is a table of the thirty largest.
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Bureau of Labor Statistics
Occupations with the Largest Job Growth (ordered by projected jobs)
2010 to 2020
2010 Median Projected
Employment Title Annual Wage Increase
Registered Nurses $64,690 711,900
Retail Salespersons 20,670 706,800
Home Health Aides 20,560 706,300
Personal Care Aides 19,640 607,000
Office Clerks, General 26,610 489,500
Food Prep & Serving, Including Fast Food 17,950 398,000
Customer Service Representatives 30,460 338,400
Heavy and Tractor-Trailer Truck Drivers 37,770 330,100
Laborers & Freight, Stock & Materials Movers 23,460 319,100
Postsecondary Teachers 45,690 305,700
Nursing Aides, Orderlies, & Attendants 24,010 302,000
Childcare Workers 19,300 262,000
Bookkeeping, Accounting, & Auditing Clerks 34,030 259,000
Cashiers 18,500 250,200
Elementary Teachers, Except Special Ed. 51,660 248,800
Receptionists and Information Clerks 25,240 248,500
Janitors & Cleaners, Except Maids 22,210 246,400
Landscaping and Groundskeeping Workers 23,400 240,800
Sales Reps, Wholesale & Mfg, Except Technical 52,440 223,400
Construction Laborers 29,280 212,400
Medical Secretaries 30,530 210,200
Supervisors of Office and Support Workers 47,460 203,400
Carpenters 39,530 196,000
Waiters and Waitresses 18,330 195,900
Security Guards 23,920 195,000
Teacher Assistants 23,220 191,100
Accountants and Auditors 61,690 190,700
Licensed Practical and Vocational Nurses 40,380 168,500
Physicians and Surgeons 111,570 168,300
Medical Assistants 28,860 162,900
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As of the 2010 Census, Arizona's population is approximately 2% of the country's total. Poetically, this State - one out of 50 - holds one-fiftieth of the population. Maricopa County holds 60% of the State's population. The thirtieth job category - Medical Assistants - is projected to add 162,900 new jobs nationwide during this decade. If those jobs are added uniformly throughout the decade and Maricopa County receives its proportionate share of those jobs, there will be a need created for approximately 195 more Medical Assistants, each year, during this decade. Any occupation not listed in the BLS top thirty, which are many, will generate less jobs in this County - assuming these projections come to fruition. Not surprisingly, in a country where an average of 10,000 individuals reach 65 each day, the health care field is well represented with eight - or 26.7% - of the top 30 (if you include Personal Care Aides).
Bureau of Labor Statistics
Occupations with the Largest Job Growth - Medical Related
2010 to 2020
2010 Median Projected
Employment Title Annual Wage Increase
Registered Nurses $64,690 711,900
Home Health Aides 20,560 706,300
Personal Care Aides 19,640 607,000
Nursing Aides, Orderlies, & Attendants 24,010 302,000
Medical Secretaries 30,530 210,200
Licensed Practical and Vocational Nurses 40,380 168,500
Physicians and Surgeons 111,570 168,300
Medical Assistants 28,860 162,900
How many of the thirty fastest growing occupations require a bachelor's degree? The majority will not. The reader can more easily come to that conclusion with the original table sorted by median annual wage.
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Bureau of Labor Statistics
Occupations with the Largest Job Growth (ordered by wage)
2010 to 2020
2010 Median Projected
Employment Title Annual Wage Increase
Physicians and Surgeons $111,570 168,300
Registered Nurses 64,690 711,900
Accountants and Auditors 61,690 190,700
Sales Reps, Wholesale & Mfg, Except Technical 52,440 223,400
Elementary Teachers, Except Special Ed. 51,660 248,800
Supervisors of Office and Support Workers 47,460 203,400
Postsecondary Teachers 45,690 305,700
Licensed Practical and Vocational Nurses 40,380 168,500
Carpenters 39,530 196,000
Heavy and Tractor-Trailer Truck Drivers 37,770 330,100
Bookkeeping, Accounting, & Auditing Clerks 34,030 259,000
Medical Secretaries 30,530 210,200
Customer Service Representatives 30,460 338,400
Construction Laborers 29,280 212,400
Medical Assistants 28,860 162,900
Office Clerks, General 26,610 489,500
Receptionists and Information Clerks 25,240 248,500
Nursing Aides, Orderlies, & Attendants 24,010 302,000
Security Guards 23,920 195,000
Laborers & Freight, Stock & Materials Movers 23,460 319,100
Landscaping and Groundskeeping Workers 23,400 240,800
Teacher Assistants 23,220 191,100
Janitors & Cleaners, Except Maids 22,210 246,400
Retail Salespersons 20,670 706,800
Home Health Aides 20,560 706,300
Personal Care Aides 19,640 607,000
Childcare Workers 19,300 262,000
Cashiers 18,500 250,200
Waiters and Waitresses 18,330 195,900
Food Prep & Serving, Including Fast Food 17,950 398,000
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Summary (in bullet form) With the surge in college enrollment beginning in Fall 2009, record numbers of students are preparing to graduate from universities in the near future. The time it takes to find employment is near historical highs. The percentage of individuals, particularly males, with a job is near historical lows. The majority of jobs lost, since the latest recession began around 2008, were mid-wage jobs. The majority of jobs created, since the labor market hit bottom, have been low-wage jobs. Whether it be loss of job, lack of investment earnings, loss of home equity (not mentioned previously) or student loan debt, many individuals near retirement will be unable to do so. Student loans, the most punitive of all forms of debt, are presenting an increased risk to the student/graduate and the economy. While those seeking employment in the health care area should fare better than most, the majority of jobs projected to be created in the thirty fastest growing fields this decade do not require a bachelor's degree. Seeking a bachelor's degree - with annual tuition and fees having increased 120% over the past seven years, - financed by debt which is near impossible to discharge, - a labor market not doing well at creating jobs above the lowest level, - a labor market not seeing normal levels of attrition through retirement, - and the degree losing some of its value derived from scarcity - carries risk to the student (at least, when viewed historically).
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About 1.5 million, or 53.6%, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed. The boom in college enrollment, that began during the Fall of 2009, will be adding to the tally of bachelor's degree holders as students near the end of the academic pipeline.
ASU Senior Headcount
2005 2006 2007 2008 2009 2010 2011 2012
16,017 16,453 16,301 16,711 17,443 18,511 19,797 Unavail
% Chg 2.7% -0.9% 2.5% 4.4% 6.1% 6.9%
For those community college students that chose to continue their education, at the university, there will be winners. There will always be a certain number of jobs available in each field. For the others willing to invest in the neighborhood of $25,000, many times using non-dischargeable debt, job lottery tickets may be their fate. The drama may not be confined to the student, future enrollment may be impacted. To close on an optimistic note, some of the job openings in the future may be satisfied with a community college degree. And, the cost is at historical lows when the income tax credit is considered.
Net Cost of Attending MCCCD for One Year
After Income Tax Credit
Tuition (30 credits @ $76/credit) $ 2,280
Books (estimated) 720
Out-of-pocket cost $ 3,000
Income tax credit (2,250)
Net cost of attending MCCCD $ 750
