Post on 26-Dec-2015
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
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