August 3, 2014

HIGHER EDUCATION BUBBLE UPDATE: Families Depending Less On Student Loans.

Amid growing recognition that easy college loans all too often turn into a lifetime debt burden, the tide may be turning. Families aren’t borrowing as quite as much to pay for their kids’ college education, reports the WSJ.

But that’s not necessarily good news for schools:

Many colleges are upping the numbers of grants and scholarships because enrollment is in decline. For private schools, that means the sticker price is often nothing like the price that students actually pay, and the schools earn much less from tuition than you might assume. Meanwhile, public schools will soon have to rely more on tuition than on state funding.

Even with all those sweeteners and discounts, students still aren’t flocking to pricy schools as readily as before. . . .

And who among us thinks it’s the Ivy League that’s getting squeezed? Of course not—it’s almost certainly mid-tier private universities and liberal arts colleges that are seeing their enrollment numbers fall as more students content themselves with cheaper public or private schools.

All is proceeding as I have foreseen. But the Ivy League isn’t immune to the trend. And my advice is, don’t be afraid to dicker. You may get a better deal.