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United States Government Accountability Office: 

America's Fiscal Future: Implications for Higher Education and Global 
Competitiveness: 

The Honorable David M. Walker: 
Comptroller General of the United States: 
Council of Graduate Schools Annual Meeting: 
Washington, D.C. 
December 7, 2006: 

About GAO: 

The U.S. Government Accountability Office GAO) is an independent agency 
in the legislative branch of the federal government: 

GAO examines how taxpayer dollars are spent and advises lawmakers and 
agency heads on ways to make government better: 

Most GAO work is done at the request of congressional committees or 
subcommittees or is mandated by public laws or committee re reports. 
GAO also undertakes research under the authority of the Comptroller 
General: 

GAO's work spans a range of oversight, insight, and foresight related 
work: 

Every GAO report reflects three core values: accountability, integrity, 
and reliability: 

GAO's Strategic Plan: 

One of GAO's four goals relates to the provision of timely, quality 
service to the Congress and the federal government to address current 
and emerging challenges to the well-being and financial security of the 
American people. 

A key component of this goal relates to the education of Americans of 
all ages: 

[See PDF for Image] 

Serving The Congress And The Nation GAO's Strategic Plan Framework: 

Mission: GAO exists to support the Congress in meeting its 
constitutional responsibilities and to help improve the performance and 
ensure the accountability of the federal government for the benefit of 
the American people. 

Themes: 

Long-Term Fiscal Imbalance: 

National: 

Global Interdependence: 

Changing Economy: 

Demographics: 

Science and Technology: 

Quality of Life: 

Governance: 

Goals and Objectives: 

Provide Timely Quality Service to the Congress and the federal 
Government to... 

Address Current and Emerging Challenges to the Well-BeiNg and Financial 
Security of the American People related to... 

* Health care needs and financing: 

* Education and protection of children: 

* Work opportunities and worker protection: 

* Retirement income security: 

* Effective system of justice: 

* Viable communities: 

* Natural resources use and environmental protection: 

* Physical Infrastructure: 

Respond to Changing Security Threats and the challenges of Global 
interdependence involving... 

* Emerging threats: 

* Advancement of U.S. interests: 

* Military capabilities and readiness: 

* Global market forces: 

Help Transform the Federal Government's Role and How It Does Business 
to Meet 21st Century Challenges by assessing... 

* Roles in achieving federal Objectives: 

* Government transformation: 

* Key management challenges and program risks: 

* Fiscal position and financing of the government: 

Maximize the Value of GAO by Being a Model Federal Agency arid a World- 
Class Professional Services Organization in the areas of... 

* Client and customer satisfaction: 

* Process Improvement: 

* Strategic leadership: 

* Employer of choice: 

* Institutional knowledge and experience: 

Core Values: 

Accountability: 

Integrity: 

Reliability: 

Source: GAO. 

Composition of Federal Spending: 

[See PDF for image] - graphic text 

3 pie charts with 5 items each. 

1966: 
Defense: 43.0%; 
Social Security: 15.0%; 
Medicare & Medicaid: 1.0%; 
Net interest: 7.0%; 
All other spending: 34.0%. 

1986: 
Defense: 28.0%; 
Social Security: 20.0%; 
Medicare & Medicaid: 10.0%; 
Net interest: 14.0%; 
All other spending: 29.0%. 

2006*: 
Defense: 20.0%; 
Social Security: 21.0%; 
Medicare & Medicaid: 19.0%; 
Net interest: 9.0%; 
All other spending: 32.0%. 

*Preliminary. 

Source: Office of Management and Budget and the Department of the 
Treasury. Note: Numbers may not add to 100 percent due to rounding. 

[End of Figure] 

Surplus or Deficit as a Share of GDP Fiscal Years 1962-2006: 

[See PDF for image] - graphic text: 

Line/Stacked Bar combo chart with 1 line (Unified) and 43 bars. 

Fiscal year: 1962; 
On-budget: -1%; 
Off-budget: -0.2%; 
Unified: -1.3%. 

Fiscal year: 1963; 
On-budget: -0.7%; 
Off-budget: -0.1%; 
Unified: -0.8%. 

Fiscal year: 1964; 
On-budget: -1%; 
Off-budget: 0.1%; 
Unified: -0.9%. 

Fiscal year: 1965; 
On-budget: -0.2%; 
Off-budget: No data; 
Unified: -0.2%. 

Fiscal year: 1966; 
On-budget: -0.4%; 
Off-budget: -0.1%; 
Unified: -0.5%. 

Fiscal year: 1967; 
On-budget: -1.6%; 
Off-budget: 0.5%; 
Unified: -1.1%. 

Fiscal year: 1968; 
On-budget: -3.2%; 
Off-budget: 0.3%; 
Unified: -2.9%. 

Fiscal year: 1969; 
On-budget: -0.1%; 
Off-budget: 0.4%; 
Unified: 0.3%. 

Fiscal year: 1970; 
On-budget: -0.9%; 
Off-budget: 0.6%; 
Unified: -0.3%. 

Fiscal year: 1971; 
On-budget: -2.4%; 
Off-budget: 0.3%; 
Unified: -2.1%. 

Fiscal year: 1972; 
On-budget: -2.2%; 
Off-budget: 0.3%; 
Unified: -2%. 

Fiscal year: 1973; 
On-budget: -1.2%; 
Off-budget: No data; 
Unified: -1.1%. 

Fiscal year: 1974; 
On-budget: -0.6%; 
Off-budget: 0.1%; 
Unified: -0.4%. 

Fiscal year: 1975; 
On-budget: -3.5%; 
Off-budget: 0.1%; 
Unified: -3.4%. 

Fiscal year: 1976; 
On-budget: -4.1%; 
Off-budget: -0.2%; 
Unified: -4.2%. 

Fiscal year: 1977; 
On-budget: -2.5%; 
Off-budget: -0.2%; 
Unified: -2.7%. 

Fiscal year: 1978; 
On-budget: -2.5%; 
Off-budget: -0.2%; 
Unified: -2.7%. 

Fiscal year: 1979; 
On-budget: -1.5%; 
Off-budget: -0.1%; 
Unified: -1.6%. 

Fiscal year: 1980; 
On-budget: -2.7%; 
Off-budget: No data; 
Unified: -2.7%. 

Fiscal year: 1981; 
On-budget: -2.4%; 
Off-budget: -0.2%; 
Unified: -2.6%. 

Fiscal year: 1982; 
On-budget: -3.7%; 
Off-budget: -0.2%; 
Unified: -4%. 

Fiscal year: 1983; 
On-budget: -6%; 
Off-budget: No data; 
Unified: -6%. 

Fiscal year: 1984; 
On-budget: -4.8%; 
Off-budget: No data; 
Unified: -4.8%. 

Fiscal year: 1985; 
On-budget: -5.3%; 
Off-budget: 0.2%; 
Unified: -5.1%. 

Fiscal year: 1986; 
On-budget: -5.4%; 
Off-budget: 0.4%; 
Unified: -5%. 

Fiscal year: 1987; 
On-budget: -3.6%; 
Off-budget: 0.4%; 
Unified: -3.2%. 

Fiscal year: 1988; 
On-budget: -3.9%; 
Off-budget: 0.8%; 
Unified: -3.1%. 

Fiscal year: 1989; 
On-budget: -3.8%; 
Off-budget: 1%; 
Unified: -2.8%. 

Fiscal year: 1990; 
On-budget: -4.8%; 
Off-budget: 1%; 
Unified: -3.9%. 

Fiscal year: 1991; 
On-budget: -5.4%; 
Off-budget: 0.9%; 
Unified: -4.5%. 

Fiscal year: 1992; 
On-budget: -5.5%; 
Off-budget: 0.8%; 
Unified: -4.7%. 

Fiscal year: 1993; 
On-budget: -4.6%; 
Off-budget: 0.7%; 
Unified: -3.9%. 

Fiscal year: 1994; 
On-budget: -3.7%; 
Off-budget: 0.8%; 
Unified: -2.9%. 

Fiscal year: 1995; 
On-budget: -3.1%; 
Off-budget: 0.9%; 
Unified: -2.2%. 

Fiscal year: 1996; 
On-budget: -2.3%; 
Off-budget: 0.9%; 
Unified: -1.4%. 

Fiscal year: 1997; 
On-budget: -1.3%; 
Off-budget: 1%; 
Unified: -0.3%. 

Fiscal year: 1998; 
On-budget: -0.3%; 
Off-budget: 1.1%; 
Unified: 0.8%. 

Fiscal year: 1999; 
On-budget: No data; 
Off-budget: 1.4%; 
Unified: 1.4%. 

Fiscal year: 2000; 
On-budget: 0.9%; 
Off-budget: 1.5%; 
Unified: 2.4%. 

Fiscal year: 2001; 
On-budget: -0.3%; 
Off-budget: 1.6%; 
Unified: 1.3%. 

Fiscal year: 2002; 
On-budget: -3.1%; 
Off-budget: 1.5%; 
Unified: -1.5%. 

Fiscal year: 2003; 
On-budget: -4.9%; 
Off-budget: 1.5%; 
Unified: -3.5%. 

Fiscal year: 2004; 
On-budget: -4.9%; 
Off-budget: 1.3%; 
Unified: -3.6%. 

Fiscal year: 2005; 
On-budget: -4%; 
Off-budget: 1.4%; 
Unified: -2.6%. 

Fiscal year: 2006; 
On-Budget: -3.3; 
Off-budget: 1.4; 
Unified: -1.9. 

Source: Office of Management and Budget, Department of the Treasury and 
the Congressional Budget Office. 

[End of Figure] 

Fiscal Year 2005 and 2006 Deficits and Net Operating Costs: 

Dollars in billions. 

On-Budget Deficit; 
Fiscal Year 2005: ($494); 
Fiscal Year 2006: ($434). 

Off-Budget Surplus*; 
Fiscal Year 2005: $175; 
Fiscal Year 2006: $186. 

Unified Deficit; 
Fiscal Year 2005: ($319); 
Fiscal Year 2006: ($248). 

Net Operating Cost; 
Fiscal Year 2005: ($760); 
Fiscal Year 2006: Not available. 

* Includes $173 billion in Social Security surpluses for fiscal year 
2005 and $185 billion for fiscal year 2006; $2 billion in Postal 
Service surpluses for fiscal year 2005 and $1 billion for fiscal year 
2006. 

Sources: The Office of Management and Budget and the Department of the 
Treasury. 

[End of table] 

Estimated Fiscal Exposures ($ trillions): 

Explicit liabilities (Publicly held debt, military & civilian pensions 
& retiree health, other); 	
2000: $6.9; 
2006: $10.2. 

Commitments & Contingencies: e.g., PBGC, undelivered orders; 
2000: $0.5; 
2006: $0.9. 

Implicit exposures; 
2000: $13.0; 
2006: $38.8. 

Implicit exposures: Future Social Security benefits; 
2000: $3.8; 
2006: $6.4. 

Implicit exposures: Future Medicare Part A benefits; 
2000: $2.7; 
2006: $11.3. 

Implicit exposures: Medicare Part B benefits; 
2000: $6.5; 
2006: $13.1. 

Implicit exposures: Medicare Part D benefits; 
2006: $8.0. 

Total; 
2000: $20.4; 
2006: $49.9. 

Source: U.S. government's consolidated financial statement, Social 
Security and Medicare Trustees reports and Monthly Treasury Statement, 
September 30, 2006. 

Note: 2006 estimates are preliminary. Estimates for Social Security and 
Medicare are at present value as of January 1 of each year and all 
other data are as of September 30. 

[End of table] 

How Big is Our Growing Fiscal Burden? 

Our total fiscal burden can be translated and compared as follows: 

Total fiscal exposures: $49.9 trillion; 
Total household net worth: $53.3 trillion: 
* Burden/Net worth ratio: 94 percent. 

Burden: 
Per person: $165,000; 
Per full-time worker: $395,000; 
Per household: $435,000. 

Income: 
Median household income: $46,326; 
Disposable personal income per capita: $32,392.

Notes: (1) Federal Reserve Board, Flow of Funds Accounts, Table B.100, 
2006:Q2 (Sept. 19, 2006); (2) Burdens are calculated using estimated 
total U.S. population as of 9/30/06, from the U.S. Census Bureau; full- 
time workers reported by the Bureau of Economic Analysis, in NIPA table 
6.5D (Aug. 2, 2006); and households reported by the U.S. Census Bureau, 
in Income, Poverty, and Health Insurance Coverage in the United States: 
2005 (Aug. 2006); (3) U.S. Census Bureau, Income, Poverty, and Health 
Insurance Coverage in the United States: 2005 (Aug. 2006); and (4) 
Bureau of Economic Analysis, Personal Income and Outlays: September 
2006, table 2, 2006:Q3, (Oct. 30, 2006). 

Sources: GAO analysis. 

[End of table] 

Composition of Spending as a Share of GDP Under Baseline Extended 
(January 2001): 

[See PDF for image] - graphic text: 

Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars 
per group. 

2005; 
Net interest: 0.8%; 
Social Security: 4.3%; 
Medicare & Medicaid: 3.7%; 
All other spending: 8.0%; 
Revenue: 20.3%. 

2015*; 
Net interest: 0%; 
Social Security: 5.1%; 
Medicare & Medicaid: 4.9%; 
All other spending: 5.6%; 
Revenue: 20.4%. 

2030*; 
Net interest: 0%; 
Social Security: 6.6%; 
Medicare & Medicaid: 9.4%; 
All other spending: 4.0%; 
Revenue: 20.4%. 

2040*; 
Net interest: 0%; 
Social Security: 6.7%; 
Medicare & Medicaid: 9.0%; 
All other spending: 4.4%; 
Revenue: 20.4%.

* All other spending is net of offsetting interest receipts. 

Source: GAO's January 2001 analysis. 

[End of Figure] 

Composition of Spending as a Share of GDP: 
(Assuming Discretionary Spending Grows with GDP After 2006 and All 
Expiring Tax Provisions are Extended): 

[See PDF for image] - graphic text: 
	
Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars 
per group. 	

2005; 
Net interest: 1.5%; 
Social Security: 4.2%; 
Medicare & Medicaid: 3.9%; 
All other spending: 10.5%; 
Revenue: 17.5% 

2015; 
Net interest: 2.5%; 
Social Security: 4.5%; 
Medicare & Medicaid: 5.3%; 
All other spending: 9.8%; 
Revenue: 17.5% 

2030; 
Net interest: 7%; 
Social Security: 6.7%; 
Medicare & Medicaid: 8.5%; 
All other spending: 9.8%; 
Revenue: 17.6% 

2040; 
Net interest: 14%; 
Social Security: 7.6%; 
Medicare & Medicaid: 10.3%; 
All other spending: 9.8%; 
Revenue: 17.6%

Source: GAO's August 2006 analysis. 

[End of Figure] 

Current Fiscal Policy Is Unsustainable: 

The "Status Quo" is Not an Option: 

* We face large and growing structural deficits largely due to known 
demographic trends and rising health care costs. 

* GAO's simulations show that balancing the budget in 2040 could 
require actions as large as: 

- Cutting total federal spending by about 60 percent or: 

- Raising federal taxes to 2 times today's level: 

Faster Economic Growth Can Help, but It Cannot Solve the Problem: 

* Closing the current long-term fiscal gap based on reasonable 
assumptions would require real average annual economic growth in the 
double digit range every year for the next 75 years. 

* During the 1990s, the economy grew at an average 3.2 percent per 
year. 

* As a result, we cannot simply grow our way out of this problem. Tough 
choices will be required. 

The Way Forward: A Three-Pronged Approach: 

1. Improve Financial Reporting, Public Education, and Performance 
Metrics: 

2. Strengthen Budget and Legislative Processes and Controls: 

3. Fundamental Reexamination & Transformation for the 21st Century 
(i.e., entitlement programs, other spending, and tax policy): 

Solutions Require Active Involvement from both the Executive and 
Legislative Branches: 

Key National Indicators: 

What: A portfolio of economic, social, and environmental outcome-based 
measures that could be used to help assess the nation's and other 
governmental jurisdictions' position and progress: 

Who: Many countries and several states, regions, and localities have 
already undertaken related initiatives (e. ., Australia, New Zealand, 
Canada, United Kingdom, Oregon, Silicon Valley California) and Boston): 

Why: Development of such a portfolio of indicators could have a number 
of possible benefits, including: 

* Serving as a framework for related strategic planning efforts: 

* Enhancing performance and accountability reporting: 

* Informing public policy decisions, including much needed baseline 
reviews of existing government policies, programs, functions, and 
activities: 

* Facilitating public education and debate as well as an informed 
electorate: 

Way Forward: Consortium of key players housed b the National Academies 
domestically and related efforts by the OECD and others 
internationally: 

Key National Indicators: Where the World's Sole Superpower Ranks: 

The United States may be the only superpower, but compared to most 
other OECD countries on selected key economic, social, and 
environmental indicators, on average, the U.S. ranks: 

16 0ut Of 28: 

OECD Categories for Key Indicators (2006 OECD Factbook): 

* Population/Migration; 
* Energy; 
* Environment; 
* Quality of Life; 
* Macroeconomic Trends; 
* Labor Market; 
* Education; 
* Economic Globalization; 
* Prices; 
* Science & Tech; 
* Public Finance. 

Source: 2006 OECD Factbook: 

[End of table] 

21st Century Challenges Report: 

Provides background, framework, and questions to assist in reexamining 
the base: 

Covers entitlements & other mandatory spending, discretionary spending, 
and tax policies and programs: 

Based on GAO's work for the Congress: 

Issued February 16, 2005: 

Twelve Reexamination Areas: 

Mission Areas: 

* Defense: 
* International Affairs: 
* Education & Employment: 
* Natural Resources, Energy & Environment: 
* Financial Regulation & Housing: 
* Retirement & Disability: 
* Health Care: 
* Science & Technology: 
* Homeland Security: 
* Transportation: 

Crosscutting Areas: 

* Improving Governance: 
* Reexamining the Tax System: 

Illustrative 21st Century questions: Education and Employment: 

How can existing policies and programs be reformed to ensure that 
employers have sufficient numbers of workers with the right skills? 

Is there a need for better coordination or integration among higher 
education policy tools (such as grants, loans, and tax preferences) 
and/or periodic examination of those policy tools that are not 
routinely subject to periodic reauthorization or appropriation, such as 
the Hope and Lifetime Learning tax credits, for which tax filers 
claimed slightly more than $6 billion in 2005? 

Illustrative 21St Century Questions: Education and Employment: 

How can the United States balance immigration policies, such as worker 
and student visa programs, to address employers' needs for workers with 
particular skills (particularly math and science), the nation's need to 
maintain global leadership in areas such as science and higher 
education, and the nation's homeland security requirements? 

Comptroller General Forum on Global Competitiveness: Implications for 
the Nation's Higher Education System: 

On September 19, 2006, the Comptroller General held a forum at GAO on 
global competitiveness: 

Attendees included the Presidents of the American Council on Education 
and the Council of Graduate Schools, as well as representatives from 
universities and the U.S. Departments of Education, Labor, State, and 
Homeland Security: 

The final document, summarizing the ideas and themes that emerged from 
the forum, will be released in January, 2007: 

Changing Landscape of Higher Education: Increasing Competition 
Worldwide for Talent: 

The United States relies on its higher education system to attract 
worldwide talent, stimulate growth in developing countries, and build 
bridges between nations and cultures: 

* International students support economic and foreign policy interests: 

* Talented foreigners bring needed skills to our workforce and have 
been important sources of innovation and productivity in our 
increasingly knowledge-based economy: 

* Even if students return home after their studies are complete, their 
experiences in the U.S. can foster greater understanding between the 
U.S. and other nations: 

However, the global landscape of higher education is changing and 
providing growing alternatives for students: 

In addition, changes to U.S. visa policies made after September 11th 
may have discouraged some students from coming here to study: 

Given these factors, the federal government has a responsibility to 
examine the impact of emerging trends in higher education on U.S. 
competitiveness, and to determine how the U.S. can best ensure that it 
continues to attract needed skills and to build bridges with other 
nations: 

Changing Landscape of Higher Education: Providing More Choices for 
Students Worldwide: 

Traditional "sending" countries have improved their educational 
capacities: 

- China's higher education capacity has increased by at least 25 
percent each year from 2000 to 2004: 

U.S. universities are establishing campuses abroad and forming 
alliances with institutions on other continents: 

- U.S. universities and colleges offer degree programs in at least 40 
countries: 

For-profit companies have expanded offerings, and advancing technology 
and online options have made it easier for students to take courses 
from virtually anywhere: 

- Laureate Education, Inc. reported a worldwide campus-based student 
enrollment of almost 200, 000 in 2006. Its online enrollment more than 
doubled between 2002 and 2006 - from 13,268 to 29,134 students. 

Other Countries Have Implemented Strategies to Attract More 
International Students: 

Introduced comprehensive marketing campaigns: 

- "The New World Class-Educated in New Zealand" 

- "Hi! Potentials: International careers made in Germany" 

European countries have a goal to form the "European Higher Education 
Area" by 2010, which would allow for greater student mobility and 
degree comparability within the EU and other countries: 

Changed visa policies to lower barriers to entry: 

- United Kingdom streamlined student visa application process: 

As a way to increase their appeal to students, made it easier to stay 
and work after graduation: 

- Australia gives additional points on application for permanent 
residency for degrees earned there: 

Against This Backdrop, the U.S. Increased Burden on Students Applying 
for Visas: 

The United States made some changes post-9/11 that expanded student 
visa requirements and made it more difficult to apply for a visa: 

* Required face to face interviews: 

* The number of security reviews for students and scholars in certain 
science and technology fields increased: 

* Many students must pay additional fee to fund Student and Exchange 
Visitor Information System (SEVIS): 

These changes, made to help protect our nation's security interests, 
may have fueled perceptions that some foreign groups are unwelcome 
here: 

The State Department recently has made some adjustments to try to help 
ease burden, such as expediting interviews for students, allowing visas 
to be issued to students longer in advance of their school start-date, 
and extending the length of time that some visa clearances are valid: 

International Student Enrollment in the U.S. Has Leveled Off, but May 
Soon Rise: 

Year: 1984-1985; 
Estimated number of international students: 342,113. 

Year: 1985-1986; 
Estimated number of international students: 343,777. 

Year: 1986-1987; 
Estimated number of international students: 349,609. 

Year: 1988-1989; 
Estimated number of international students: 366,354. 

Year: 1989-1990; 
Estimated number of international students: 386,851. 

Year: 1990-1991; 
Estimated number of international students: 407,529. 

Year: 1991-1992; 
Estimated number of international students: 419,585. 

Year: 1992-1993; 
Estimated number of international students: 438,618. 

Year: 1993-1994; 
Estimated number of international students: 449,749. 

Year: 1994-1995; 
Estimated number of international students: 452,635. 

Year: 1995-1996; 
Estimated number of international students: 453,787. 

Year: 1996-1997; 
Estimated number of international students: 457,984. 

Year: 1997-1998; 
Estimated number of international students: 481,280. 

Year: 1998-1999; 
Estimated number of international students: 490,933. 

Year: 1999-2000; 
Estimated number of international students: 514,723. 

Year: 2000-2001; 
Estimated number of international students: 547,867. 

Year: 2001-2002; 
Estimated number of international students: 582,996. 

Year: 2002-2003; 
Estimated number of international students: 586,323. 

Year: 2003-2004; 
Estimated number of international students: 572,509. 

Year: 2004-2005; 
Estimated number of international students: 565,039. 

Year: 2005-2006; 
Estimated number of international students: 564,766. 

* A recent CGS poll of nearly 200 graduate schools showed a 12 percent 
jump over the previous year in first-year enrollment of international 
students: 

Source: Institute of International Education (IIE) data for all years 
except 2004/05, which is from the College Board Annual Survey of 
Colleges. 

[End of Figure] 

In Addition, the U.S. Has the Most International Students, but Our 
Share Has Decreased: 

[See PDF for Image] - graphic text] 

Bar graph with two bars per country, one representing estimated 
percentage of international students in 2000 and the other representing 
the estimated percentage of international students in 2004. 

Country: New Zealand; 
2000: 0.2%; 
2004: 2.6%. 

Country: Japan; 
2000: 3.6%; 
2004: 4.4%. 

Country: Canada; 
2000: 6.1%; 
2004: 5.0%. 

Country: Australia; 
2000: 5.6%; 
2004: 6.3%. 

Country: France; 
2000: 7.3%; 
2004: 9.0%. 

Country: Germany; 
2000: 10.0%; 
2004: 9.8%. 

Country: United Kingdom; 
2000: 11.9%; 
2004: 11.3%. 

Country: United States; 
2000: 25.3%; 
2004: 21.6%. 

Country: Other OECD countries*; 
2000: 15.3%; 
2004: 15.1%. 

Country: Non-OECD countries; 
2000: 14.5%; 
2004: 14.8%. 

* Other countries are: Austria, Spain, Republic, Finland, and Korea. 

Note: Information in this graph includes only those OECD countries for 
which both 1998 and 2003 data were available. GAO did not assess the 
reliability of the data for the percentage of students enrolled in 
schools outside the U.S. Also, the definition of foreign students is 
not uniform across countries. 

Source: Organization for Economic Co-operation and Development (OECD) 
data. 

[End of Figure] 

Tax Preferences More Widely Used Than Federal Financial Aid: 

[See PDF for Image]- graphic text: 

Bar graph with two bars for each year.  One representing the Title IV 
aid recipients and the other representing the tax returns claiming 
postsecondary tax credits and/or tuition deduction. 

Year: 1997; 
Title IV aid recipients: 8.07%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 0.0%. 

Year: 1998; 
Title IV aid recipients: 8.25%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 4.65%. 

Year: 1999; 
Title IV aid recipients: 8.16%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 6.44%. 

Year: 2000; 
Title IV aid recipients: 7.78%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 6.82%. 

Year: 2001; 
Title IV aid recipients: 7.61%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 7.21%. 

Year: 2002; 
Title IV aid recipients: 8.39%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 9.56%. 

Year: 2003; 
Title IV aid recipients: 8.39%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 10.63%. 

Year: 2004; 
Title IV aid recipients: 9.43%; 
Tax returns claiming post secondary tax credits and/or tuition 
deduction: 11.63%. 

Source: GAO analysis of Budget of the United States Government and 
Internal Revenue Service data (see: 

[End of figure] 

Cost of Graduate School Also Problematic: 

The annual price of attending master's and doctoral programs is on the 
rise and paying for graduate education is challenging for all students: 

It will be important to consider what impact, if any, the rise in 
graduate borrowing will have on future enrollment and employment: 

CGS and others continue to study these important issues: 

Key Oversight Areas for Congress: 

On November 17, 2006, the Comptroller General submitted a letter to 
Congress recommending three areas of consideration to improve the 110th 
Congress' oversight of federal programs: 

Targets for near-term oversight (e.g., enhancing border security and 
enforcement of existing immigration laws): 

Policies and programs that are in need of fundamental reform and re- 
engineering (e.g., assuring the quality and competitiveness of the U.S. 
education system): 

Governance issues that should be addressed to help ensure an 
economical, efficient, ethical, and equitable federal government 
capable of responding to the various challenges and capitalizing on 
related opportunities in the 21st century (e.g., pursuing the 
development of key national indicators): 

Assuring the Quality and Competitiveness of the U.S. Education System: 

Recommended Congressional actions to improve oversight of the education 
system: 

Assess the impact of efforts to close achievement gaps among 
disadvantaged populations in K-16+ education: 

Assess the effectiveness of education programs in meeting the needs of 
the 21 St century workforce: 

Assess the efficiency and effectiveness of programs designed to promote 
access to and affordability of postsecondary education: 

Assure a proper balance between immigration policies, such as work and 
student visa programs, to address the nations' need for people with 
skills (particularly in areas such as math and science) and the 
nations' homeland security requirements: 

Key Leadership Attributes Needed for These Challenging and Changing 
Times: 

* Courage: 
* Integrity: 
* Creativity: 
* Stewardship: 

On the Web: 

Web site: [Hyperlink, http://www.gao.gov/cghome.htm]: 

Contact: 

Paul Anderson, Managing Director, Public Affairs AndersonP1@gao.gov 
(202) 512-4800: 

U.S. Government Accountability Office 441 G Street NW, Room 7149 
Washington, D.C. 20548: 

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