There is a probable bubble in higher education. Higher ed costs just seem to keep increasing in spite of lower cost alternatives like online learning. Tuition keeps going up so students need to borrow more. The above chart and its accompanying Atlantic article “Student loans have grown by 511% since 1999’ by Daniel Indiviglio give a picture of how unusual the growth in student loans has been. From Indiviglio’s article (here):
..... This student loan growth sure looks unsustainable. But it's hard to see how this bubble's inevitable pop might look. Ultimately, it might look more like a balloon slowly deflating, if a large portion of college graduates decide to strategically default on their debt over time.
All this college debt could put the U.S. on a slower growth path in the years to come. As Americans grapple with high student loan payments for the first few decades of their adult lives, they'll have less money to spend and invest. All that money flowing into colleges and universities is being funneled away from other industries where it would have been spent in future years. Of course, this would be a rather unfortunate irony: higher education is supposed to enhance a nation's growth, but with such an enormous debt burden, graduates might not be able to spend and invest enough to allow that growth to occur.....
On the other hand, there is a constant drumbeat that our next generations need more and more education, usually without any cost considerations. A recent Oregonian article “Oregon loses $35 million a year to college student failure, says American Institute for Research” by Bill Grave is an example. It begins (here):
About 40 percent of students who enter Oregon's colleges and universities drop out before earning a degree, and that failure costs the state about $35 million in lost income and taxes, according to a report released today by the American Institutes for Research….
…. The research group calculated losses by taking the number of students who fail to graduate and multiplying that by the difference between the median earnings of young adults with some college but no degree and of those with a bachelor's degree…..