If you track any cost increase over the course of several decades you’re going to get a large percentage increase. Prices inflate. So hearing that college tuition has increased 1,135% since 1978 might not immediately seem alarming, until you put that cost increase side-by-side with other costs in the economy.
And then you begin to see that the higher education bubble is very, very real:
“The historic funding model for higher ed is close to unsustainable,” incoming Dartmouth President Phil Hanlon tells the New York Times. “We can’t continue superinflationary tuition increases.”
It’s worth mentioning that the only reason they’ve been able to keep up “superinflationary” tuition increases as long as they have, turning campuses into centers of opulence and making higher education bureaucrats very rich, is the government subsidizing student loans.
Left to it’s own devices, the market for higher education would have long ago began to diminish in the face of these price increases. The cost would have simply deterred students from going to college. But our lawmakers, at the urging of the higher ed industry which stood to make a windfall, turned student loans into an entitlement. You can get a student loan with very little in the way of qualifications, and then promptly turn that money over to a university which is happy to accept it until you either drop out or emerge with a degree in hand that may or may not be worth what you paid for it.
And somewhere along the way, the higher ed folks figured out that the more students they crammed through their campuses, at ever increasing tuition rates, the more money they could rake in. They get paid up front, after all, while debt accumulation is the student’s problem.
Now we’ve inflated tuition to meteoric heights, while the value of a degree has shrunk, and student loan debt is the fastest-growing area of credit delinquency in the nation.
There is a day of reckoning coming for higher education.