Is There a Bubble in Higher Education?

by Marilou Moursund on September 14, 2010

in Debt,Education,Recommended Reading

With the default rate on education loans steadily climbing higher, there has been a lot of discussion recently about a possible bubble in higher education.  From Michael Barone”s recent article in The Washington Examiner:

“Imagine that you have a product whose price tag for decades rises faster than inflation. But people keep buying it because they”re told that it will make them wealthier in the long run. Then suddenly they find it doesn”t. Prices fall sharply, bankruptcies ensue, great institutions disappear.

Sound like the housing market? Yes, but it also sounds like what Glenn Reynolds, creator of instapundit.com, writing in The Examiner, has called “the higher education bubble.”

Government-subsidized loans have injected money into higher education, as they did into housing, causing prices to balloon. But at some point people figure out they”re not getting their money”s worth, and the bubble bursts.”

All of our friends have college-aged children, and college costs and healthcare costs are the main topic of conversation.  Retirement is also a major concern, but we have to get the chicks out of the nest first.  I also saw this   There is a huge difference in in-state versus out-of-state tuition at the major state universities.

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