Saturday, January 24, 2015

bubble-ology from fracking to student loans, or, "they majored in liberal arts and they're lazy liberal f__ks on top of that...,"

wikipedia |  The higher education bubble is a hypothesis that there is a speculative boom and bust phenomenon in the field of higher education, particularly in the United States, and that there is the risk of an economic bubble in higher education that could have repercussions in the broader economy. Enrollment at more than 40 percent of private colleges and universities declined during 2012, forcing the institutions to offer steep tuition discounts to fill seats.[1] President Obama nearly doubled the federal Pell Grant Program, from $19 billion in 2009 to $36 billion for 2013.[2]

According to the theory, while college tuition payments are rising, the rate of return of a college degree is decreasing,[3] and the soundness of the student loan industry may be threatened by increasing default rates.[4] College students who fail to find employment at the level needed to pay back their loans in a reasonable amount of time have been compared to the debtors under sub-prime mortgages whose homes are worth less than what is owed to the bank.[5]