HIGHER EDUCATION BUBBLE UPDATE: Higher Education At The Covid-19 Crossroads.

The Covid-19 pandemic is placing many universities under extreme budget pressure, owing to the loss of high-margin international students. And, if schools cannot open on campus this fall, many may be forced to discount their tuition to students. Some observers think it likely that many universities will be forced to close, as a result of these pressures.

The longer term picture is not much better. Higher education costs have been rising at an unsustainable rate for decades. Tuition at four year private schools now runs above $40,000 per year, while tuition at public universities runs above $15,000 per year, not including living costs. Public universities were free in the 1960s, and tuition at UC Berkeley ran about $500 per semester as recently as the late 1970s. “Working your way through college” was quite feasible in those days, with a 10 hour per week job and a summer job. No more. The rate of increase has been much higher than inflation, and has even been higher than medical inflation in the US, which is really saying something. The Covid-19 pandemic is merely accelerating a reckoning in higher education, a reckoning that has been coming for quite some time.

I agree.