Will Colleges Be the Next Bubble to Burst?

Are colleges going  to be the next big bubble that bursts?

College prices continue to rise even as fewer and fewer parents are remotely able to cover the tab. Ever since George Washington University broke the $50,000-a-year barrier awhile ago, a growing number of elite schools now charge at least that much. Imagine that. Or rather, imagine paying that. I figure that the costs of attending a $50,000 schools breaks down to roughly $1,600 a week.

During the past 25 years, higher ed costs have soared by 440% , which is nearly twice the rate of medical care.

In an opinion piece in The Chronicle of Higher Education on Wednesday, a couple of higher ed veterans argue that colleges and universities are careening into their own version of the mortgage/financial markets implosion. A perfect storm does seem to be brewing, but I think schools are largely in denial. I suspect that many college presidents and trustees hope the recession will recede this year so they can return to their old ways.

As I mentioned in my recent college post for CBSMoneyWatch.com, many experts believe that monumental changes will occur. If you are lucky enough to be able to afford a school that charges $50,000 a year, however, you might never notice.

Learn more about evaluating colleges and shrinking the price by reading my book,  The College Solution, and visiting my blog’s archives. Lynn O’Shaughnessy

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