The Student Loan Bubble, and SFAI Data

Fall 2011. The cost of a higher education is incredibly huge.  Not many can afford it.  To pay for college we take out substantial loans, perhaps in the same way that some home owners took out bad mortgages.  Colleges often refer to student loans as "financial aid."  Now, the amount of student loan debt exceeds all credit card debt in the United States.  With the enormous number of recent college graduates who are unemployed or underemployed, this is just daunting.  Not surprisingly, data released in September of 2011 by the U.S. Department of Education shows a significant increase in the rate at which student loan borrowers are defaulting.  (The released federal data is 2009 data; more recent data may show even higher default rates across the country.)

Below is data related to SFAI:

  • According to the U.S. Department of Education, the 2009 default rate for SFAI student loan borrowers is 6.4%.  (Comparatively, the 2009 default rates for student borrowers at California College of the Arts, Rhode Island School of Design and UC Berkeley are 3.7%, 2.1% and 1.2% respectively.)
  • According to the National Center for Education Statistics database, the admission rate for applicants to SFAI in 2010 was 96%.  The admission rate for males was significantly higher.  The overall graduation rate for SFAI undergraduates is 56%.
  • The flat rate tuition at SFAI is over $17,023 a semester or over $34,000 for an academic year.  First year undergraduates are required (unless they qualify for an exception) to live in student housing, which adds at least another $11,280 for a room with a shared bath, and are also required to purchase $500 meal cards for on campus food.  Without adding the miscellaneous administrative fees charged by the campus, a first year undergraduate could be in a deep $46,000 hole at the end of her first year at SFAI.  If she is lucky, the student will receive a scholarship, grant or have rich parents.
The financial burden (heavy debt) placed on American students is just too enormous and harmful.  Colleges across the country (including SFAI) should avoid raising tuition and focus more of their efforts on raising big cash for scholarships.  Our federal government needs to take the lead in monitoring and preventing the types of college admission and loan practices that harm students and this country.  The Congress needs to provide more grant-based funding for higher education, and provide an ambitious and comprehensive jobs programs, and tax the "top 1%" to make this happen.