Friday, May 09, 2008

Now it gets interesting

The coming fall of PCU, triggered by intolerable costs, is preceded by the final stages of rising prices and hemorrhaging subsidies. This bubble is now the subject of more and more active discussion in the blogosphere and the specialized higher ed press.*

Over at the Yeah Right blog, the mysterious Batman refers to this article on the student loan bubble, following the lead started by Instapundit:
... about "the next market bubble" being higher education, where government subsidies (obstensibly, to improve access to higher education) have had the unintended (but certainly foreseeable) consequence of inflating the costs of college: "Over the last 10 years, after adjusting for inflation, tuition is up 48% at public schools and 24% at private schools."

There are several important parallels with the recent housing bubble; policy goals of extending participation (in higher education, in home ownership) led to people with serious credit risks borrowing a lot to pay a lot for something that, it turns out, isn't worth what they paid....

This bubble, like all bubbles, will have its tragic stories, so I don't want to cheer this on. But if there's a silver lining, it's that it may make people rethink the value of those four years that polite society assumes you need.

Discussion ensues.

How much you wanna bet now on a federal plan in 2009 or 2010 to "save" higher education from a government-enabled burst bubble? And, of course, to keep pushing college education on students who don't need or want it? Just like pushing houses on people who don't need or can't afford them ....

POSTSCRIPT: Nice blog, BTW. Although Batman seems even more mysterious than we are :)

Additional thoughts about how the cultural elite skews education spending the wrong way, from Jerry Pournelle.

POST-POSTSCRIPT: Some bloggers caught Megan McArdle's hysterically funny take on HillaryPlan, but not all of us saw it:
What do Americans care most about this election season? The troubled housing market, and the short supply of oil. That's why Hillary is here with a plan. Specifically, a plan to discourage investment in the oil industry through a windfall profits tax, and to destroy the mortgage market by freezing foreclosures and interest rates. That way, no one has to worry about oil or houses, because there won't be any to worry about. That's just the kind of thoughtful, caring politician she is.
Plus Megan has some really cool economics charts that take me back to college days. I guess my public college education is worth something. And it means Megan is way cool.

And that is why my new life goal is to meet and marry Megan McArdle.
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* Your guides to the academic scene, Inside Higher Ed and the Chronicle of Higher Education.

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