The College Market Bubble -- Is It Bursting?

A few years ago, I noticed that tuition increases were consistently outpacing inflation, and this lead to the obvious conclusion that, if this persisted, then a bubble would form and inevitably burst. Living a block away from a State University, I've noticed that enrollment has completely plunged in the past six months, and this made me start to think about whether we may be on the brink of the bubble bursting. Later, I found a few others who felt like it was.

One such forcaster is Gerald Celente, who has predicted a collapse of the college market, along with the housing-market, commercial real estate market, and credit card market. Another is American Consumers Newsletter, who wrote of the College Market Bubble:

Prices are high and rapidly rising. Millions are clamoring to buy. Many are taking on debt to cover the cost. A stock market bubble? A housing market bubble? No, the college market bubble.

A speculative bubble occurs when the price of a product or service exceeds its fundamentals, yet excessive numbers of buyers keep driving up the price. This is happening in the college market today. The fundamentals of a bachelor's degree--greater lifetime earnings, ticket to the middle class--have long been worth the price. But that era may be ending. Is a college education still worth the cost? Yes, but the returns are diminishing, and they are no longer guaranteed.

(More at link)

With this in mind, I'd like to start a thread where we can post news, theories, and anecdotal observations that can give us an idea of if/when this bubble will burst, and how bad it will be. I'll get the ball rolling...

Enrollment drops at Private Colleges, including Kalamazoo College

And the whopper today: Florida State University may cut 21 programs, lay-off faculty, close Panama City campus. (Hat tip to RetinoidReceptor on the FSU news).




[edit on 15-4-2009 by theWCH]

This is very intrersting, and defintitely seems to be the way things are going. I'm pretty excited to see what people come up with, I'll certainly be doing some research to contribute.

Good thread

[edit on 15-4-2009 by Heatburger]