Why Many American Colleges Will Be Going Out of Business- Student Loan Bubble

Looking for trends.
In recent years the price of college has increased dramatically. Tuitions have largely outpaced inflation, and the average student loan debt of 4 year graduates of schools for those reporting their figures was nearly $30,000. Of course, many for profit colleges  did not disclose student debt loads. I can only assume the real number is higher.
Increased student debt is ever increasing economic burden, affecting decision making by graduates. Instead of purchasing a new car or house, they're paying off interest and principal, which is willingly provided by creditors as the loans are guaranteed by the federal government.
Now, in many countries education is financed entirely by the government but the competition to get into the Universities is fierce. The fact that the American government guarantees student loans means that almost anyone who wants to can "afford" school, which democratizes higher education and offers anyone in society upward mobility.

Video recap on student loan bubble

The challenge with doing it in such a manner is while many students get the opportunity they might not otherwise have, this is a tax-payer give away to the banks will happily lend to poor students (as in "bad" students) knowing that if they fail to make good on the loan, the government will pay them off.
The schools meanwhile jollily raise their prices to meet the artificially high demand, and the rising costs and loan guarantees become a transference of wealth from society to the banks and private Universities.
Eventually something's gotta give, and Congress will institute a cap on guaranteed student loan debt, leading to decreased demand for  overpriced college.
Why "overpriced?" Because viable alternatives like Khan Academy (online) are coming into being. With YouTube and the Internet you can take courses with the best professors in the world at your convenience. This is becoming a viable way to learn, further decreasing future demand, and putting money and time in the back pockets of students.
Not that demand for a four year institution  will disappear altogether (Harvard and the University of California system will still be full) but with new viable and cheaper learning alternatives (including community college) inevitably demand will ratchet back, and many four year intuitions will find themselves unable to meet their expenses, thus going out of business.

For the record, student loan debt is currently over 1 Trillion dollars.


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