Colorado VC Brad Feld’s blog entry today raises the issue of how the unsustainable student financing higher education has broad implications.
The post was driven by this TED talk of another VC Greg Gottsman. At one level, we know all the issues, but he throws out some real attention getting statistics:
- College Tuition is UP 1,000% since 1978 (this is 4 times faster than even Healthcare costs)
- Since 2000, tuition is UP 70% and entry college grad wages are DOWN 14%
Since, on balance, students with student debt do not buy cars or houses, get married or start businesses, this is a tremendous negative impact on the economic and social future of our country.
It is, of course a complicated problem, but one of Greg’s comments stuck out to me – because I think his statement was WRONG.
Talking of College Presidents, Greg says that student debt is “…a major issue facing your customer…”
From my view, a big part of the problem is that the College President does not view the student as their customer – rather the student is just a necessary participant to extract money form the government, loan companies and parents. After these constituencies are considered, there are the faculty and alumni and then maybe the students.
What if we tied the College Presidents compensation and tenure directly to the net income impact (increased earnings less education expense) of their students?