US: Higher education may be next bubble to burst

The public has become all too aware of the term 'bubble' to describe an asset that is irrationally and artificially overvalued and cannot be sustained. The dot-com bubble burst by 2000. More recently the overextended housing market collapsed, helping to trigger a credit meltdown. The stock market has declined more than 30% in the past year, as companies once considered flagship investments have withered in value. Is it possible that higher education might be the next bubble to burst? ask Joseph Marr Cronin and Howard E Horton in The Chronicle of Higher Education. 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% - more than four times the rate of inflation and almost twice the rate of medical care. Patrick M Callan, the centre's president, has warned that low-income students will find college unaffordable.
Full commentary on The Chronicle of Higher Education site