Jun 11, 2010 at 9:07 AM
Are college tuition rates the heir to inflated housing prices -- a bubble about to burst? Here are eight arguments why they are (and here's the source and explanations for the arguments):
- Tuition is, and has been, increasing at double triple the rate of inflation
- Students are borrowing more than ever to pay for college
- For profit colleges are paying homeless people to take out federal loans to enroll
- Colleges are on a non-teaching staff hiring spree that far outpaces enrollment
- For profit reliance on federal loans has reached an all time high
- Schools are spending on luxurious amenities to lure in more students
- College president salaries are sky high, even in a historical economic downturn
- The student loan problem cuts across all schools, for profit and nonprofit
So what do you think: Is the (government caused) tuition bubble going to burst?
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If federal loans are cut or reduced, it will
Or rather, it won't, but those tuition prices will certainly come down
Absolutely, the bubble MUST burst. Go back to your Austrian Business Cycle Theory training, and I think you can see the analogy both as an effect of the overall cycle and as a microcosm in and of itself. As "easy credit" is put into the system, an unsustainable boom is created. Hence why we see more and more students getting worthless degrees despite the cost, and universities grow artificially both in size and scope.
And when the bubble bursts -- because that funding will not last forever -- there will be a lot of angry people at first but it will be better in the long run.
This is already happening in some places. UT-Austin's budget for the first time in a VERY long while is decreasing, and the entire faculty/staff is concerned that they won't get their annual raise. Kind of humorous if you ask me...
See Gary North at LRC on this topic, I think he's pretty much right.
I'd highly appreciate each of you to donate to the Roy Needs Money for College Foundation. Thank you.
I'm going to go cry softly in a corner now while rocking back and forth.