According to the Washington Examiner …
Higher education is in a bubble, one soon to burst with considerable consequences for students, faculty, employers, and society at large.
The past decades’ history of tuition growing much faster than the rate of inflation, with students and parents making up the difference via easy credit, is something that can’t go on forever. It won’t.
For the past several decades, colleges and universities have built endowments, played moneyball-style faculty hiring games, and constructed grand new buildings, while jacking up tuitions to pay for things (and, in the case of state schools, to make up for gradually diminishing public support).
That has been made possible by an ocean of money borrowed by students — often with the encouragement and assistance of the universities.
Right now, people are still borrowing heavily to pay the steadily increasing tuitions levied by higher education.
But that borrowing is based on the expectation that students will earn enough to pay off their loans with a portion of the extra income their educations generate.
Once people doubt that, the bubble will burst.
Post-bubble, students are likely to be far more concerned about getting actual value for their educational dollars.
Faced with straitened circumstances, colleges and universities will have to look at cutting costs.
Excerpted from Washington Examiner: Further thoughts on the higher education bubble, August 8, 2010
http://www.washingtonexaminer.com/opinion/columns/Sunday_Reflections/Glenn-Harlan-Reynolds-Further-thoughts-on-the-college-tuition-bubble-100216064.html#ixzz0w6axRS7x
The Homa Files 
August 12, 2010 at 12:49 pm |
I saw a good Frontline episode on this a few weeks back…. the segment was focused on the for-profit segment of eduction (i.e. Strayer, University of Phoenix, etc.)…. the U.S. Government is holding the bag on most education loans, both conventional University and for-profit programs… many students that borrow for education (particularly related to for-profit programs like certificates in “private investigation”, “medical billing,” “criminal justice” and the like don’t need advanced schooling and don’t stand a chance of making up the difference of direct costs and foregone income (opportunity cost)…. it’s like another tidal wave that’s brewing of bad debt akin to the housing crisis…. it definitely looks like a bubble that needs to burst at some point.