HIGHER EDUCATION BUBBLE UPDATE: More Ominous Statistics for Higher Ed Industry.

Barely a week goes by without the release of new statistics pointing to the utter unsustainability of America’s existing higher education model. Last week, we reported that, thanks rising default rates, Moody’s is considering downgrading securitized student debt—a $1.2 trillion (and growing) problem fueled in part by federal subsidies for overpriced graduate programs. This week, the National Association of College and University Business Officers released a report showing that despite ballooning sticker prices, private four-year colleges have stagnant revenue because they have been forced to boost “tuition discounts” (grants, aid, and scholarships) to keep enrollment up. Nonetheless, enrollment is barely growing. . . .

The data point to serious trouble on the horizon for non-elite colleges, which are being squeezed the most. While more students are willing to play the sticker price (or something close to it) for selective institutions, non-elite colleges are forced to compete for students by jacking up aid further and further, and losing revenue as a result. . . . Higher education professionals are clearly concerned about the rising discount rates mean for the future of the industry. If revenue and enrollment stay flat, lower-tier colleges will be squeezed harder and harder, and perhaps some will need to close their doors.

If only someone had warned them.