The college education bubble may be one of the few asset bubbles left in the United States unscathed by the recession.
It is, in many ways, an interesting bubble, because the underlying asset is human capital. But you can’t foreclose on a human, and that human also can’t declare bankruptcy on their student loans. But the value of that human can plummet in an unemployment crisis (earnings) or if their career is in decline (real estate developer).
But, like the real estate bubble before it, easy capital from the U.S. government is spurring it forward. Access to government loans and low interest rates make the high up front costs of education seem plausible.
Tuition continues to rise, according to the College Board’s latest survey, even though the country is in its deepest downturn since the great depression.
Photo: College Board
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