Thursday, November 6, 2008

"The Coming College Bubble?"

On October 1st I speculated that higher education could be the next bubble to burst in the deleveraging process ("The Next Bubble to Burst in the Deleveraging Process: Higher Education?").

I just came across it today, but on October 23rd, Forbes published an article with a similar thesis, "The Coming College Bubble?".


Jimmy Carter said...

MSRP [stated tuition rates] are totally bogus numbers designed to 'soak the rich' just like the policies of our newly elected president.

Universities 'mark up' the price tag so they can overcharge some to subsidize many.

DaveinHackensack said...

That's part of it too, Jimmy Carter, but even if you used average effective tuition numbers (i.e., you averaged the actual tuitions of all the students in a school, including those who paid 'MSRP' and those who got financial aid or free rides), I think you'd see they have been rising much faster than inflation over the last two or three decades. I don't think you would have seen this sort of inflation if the federal government hadn't helped fuel it with grants and cheap loans.