PJ Media

Ivy league college bubble bust

John Wasik, author of a new book, a href=”http://www.amazon.com/gp/product/1576603563?ie=UTF8tag=wwwviolentkicomlinkCode=as2camp=1789creative=9325creativeASIN=1576603563″span style=”font-style:italic;”The Audacity of Help: Obama’s Economic Plan and the Remaking of America/span/aimg src=”http://www.assoc-amazon.com/e/ir?t=wwwviolentkicoml=as2o=1a=1576603563″ width=”1″ height=”1″ border=”0″ alt=”” style=”border:none !important; margin:0px !important;” / has a good article at Bloomberg news up today a href=”http://www.bloomberg.com/apps/news?pid=20601039sid=a_jTWOco3Se0″on the Ivy League college bubble: /abr /br /blockquoteA high-priced college may not be worth the price of admission.br /br /As the economy forces more students out of the classroom and graduates into under- or unemployment, a college enrollment bubble may be starting to deflate.br /br /The recession, combined with rising college costs, has accelerated a college affordability crunch that is exacerbated by shrinking family incomes, diminished home equity and reduced household wealth.br /br /As many as one-third of all private colleges surveyed by the National Association of Independent Colleges and Universities said they expected enrollment to drop in the next academic year. /blockquotebr /br /The author has some good advice for those who will be going to college during this bubble:br /br /blockquoteIf you are planning ahead, an even more important number to watch is the rate of tuition increase, which has averaged 7.3 percent annually for state universities over the past half- decade. Your college-savings portfolio rate of return will need to match or beat that number if you are going to keep up with the cost of college — no easy feat over the last few years.br /br /You would be particularly challenged to match the tuition increases in Hawaii and Kentucky, which have averaged more than 12 percent over that period.br /br /An even simpler approach is to shop for a lower-priced college, search for grants and limit your debt as much as possible. That way, even if the job market is sour upon graduation, it will be less of a financial burden while you wait until all of the other financial bubbles have fully deflated. /blockquote