From Forbes, “Could independent colleges be the next bubble?”:
Home builders and banks aren’t the only ones facing economic headwinds these days. America’s undercapitalized independent colleges are staring at a spiral of major threats to solvency as penny-pinching students and parents consider cheaper options, and funding sources dry up. As a result, they could be the next bubble industry to pop.
The crush is coming fast. According to a September 2008 study by the National Association of Independent Colleges and Universities, of the 504 member institutions surveyed, one-third said the credit crunch had hurt enrollment, and about a fifth of respondents said they had fewer returning students than expected. Roughly the same number said they had a smaller incoming freshman class than expected.
We’ve posted here several times on Charles Murray’s recent book, “Real Education,” which argues as one of four theses that the B.A. model of higher education does a great disservice to most students. Better for many students in terms of education, income and personal satisfaction would be a technically oriented program, including two-year community college programs, that would demonstrate a student’s proficiency through certification exams.
But how do get from here to there? Murray got that question at a recent talk at the American Enterprise Institute, and he responded that financial considerations would play a big part. Yes, some elite universities have huge endowments, but otherwise, colleges face big money questions — as do students paying tuitions and costs.
From today’s Washington Post, “Cost of Higher Education Heading Up“:
College students and their parents should brace for sharp tuition increases as the widening economic downturn begins to hit campuses across the country, an organization of higher education officials said yesterday.
The warning came in response to an annual national survey of tuition and fees that showed that college costs rose only modestly for the current academic year. But that report, released yesterday by the College Board, was based on data collected before June and did not reflect many of the economic trials embroiling the country.
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