Will Higher Education Be the Next Bubble to Burst?

Is it possible that higher education might be the next bubble to burst? Some early warnings suggest that it could be.

With tuitions, fees, and room and board at dozens of colleges now reaching $50,000 a year, the ability to sustain private higher education for all but the very well-heeled is questionable. According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care. Patrick M. Callan, the center’s president, has warned that low-income students will find college unaffordable.

Meanwhile, the middle class, which has paid for higher education in the past mainly by taking out loans, may now be precluded from doing so as the private student-loan market has all but dried up. In addition, endowment cushions that allowed colleges to engage in steep tuition discounting are gone. Declines in housing valuations are making it difficult for families to rely on home-equity loans for college financing. Even when the equity is there, parents are reluctant to further leverage themselves into a future where job security is uncertain.

The Chronicle of Higher Education: Will Higher Education Be the Next Bubble to Burst?

(via Beerken’s Blog)

Vaguely related: Although I’ve trash talked grad school here in recent times, I’ve been thinking about going to grad school for organizational psychology. Anyone have any thoughts on this?

1 Comment

  1. -it makes no sense to go to school unless you are going to do something that requires the piece of paper

    -that said, if you want to “change your life” then going to school will do that, regardless of whether you use your degree or not. But a clever guy like you can probably figure out better ways to fundamentally change your life without subjecting yourself to organizational stupidity and big bills.

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