[ap22213]

Back around 2000, when I saw education costs rising (and was a big believer in market forces), I figured more educators would enter the market, and things would stabilize.

It's been 15 years, and I haven't seen any new colleges or universities formed.

What happened?

[cgearhart]

The market did accommodate it. Lots of for-profit schools (Wyotech, Heald, etc.) popped up and made a killing largely by helping students fill out loan paperwork for the maximum allowable amount while providing a dubious credential without meeting the standards of reputable accreditation boards. The credits were not transferrable in most cases, and many of the schools have been shuttered for charges bordering on fraud. (A friend from HS owes more on loans for 18 months at Heald than I owed from a 4-year degree at a state school.)

[TheOtherHobbes]

Udemy etc and the tutorial market are booming.

Universities in countries with inflated fees and tuition loans are about to fall off a cliff. I'll be surprised if they're still around a generation from now.

The Ivy League will survive because of social and political momentum. But colleges outside the prestige circuit are going to have real problems getting students for high-cost low-return education.

[xrange]

>The Ivy League will survive because of social and political momentum.

...and their endowments in $10-40 billion range:

http://www.ibtimes.com/ivy-league-endowments-2015-princeton-...

[Apocryphon]

Credentialism in industry will still be a problem. But hopefully employers are starting to combat that:

https://www.washingtonpost.com/news/on-leadership/wp/2015/09...

[s73v3r]

"Udemy etc and the tutorial market are booming."

Are they? Are significant amounts of people actually foregoing college to learn from them instead? And, more importantly, are they getting hired in good jobs in the field they're studying in?

[tomp]

> and was a big believer in market forces

A non-market force happened. The government started guaranteeing student loans. Although honestly, even without that, I don't think people are good enough in estimating the extra payoff of education they haven't received yet over their 30+ years long career in the future, to properly evaluate the market value of college education; instead, they were just believing the old mantra "college is worth it".

[ap22213]

Wait - wouldn't that cause more demand and thus more opportunity on the supply side?

[tomp]

Exactly - more demand, and thus a rising price - as has happened in recent years.

[rhino369]

Since 1980, the number of colleges has gone from roughly 2000 to roughly 3000. That doesn't account for increases in class size.

The demand is still very strong. The millennial generation was told, go to college or you'll have to flip burgers your whole life.

One huge problem is college demand is fairly inelastic. Another is that colleges are mostly non-profit institutions who aren't out for institutional profits. Instead they compete for prestige. If they spend a bunch of money on useless shit, USNEWs will rank them higher.

Students and parents aren't urged to consider price. In fact they are encouraged to ignore price. Just get in first! then worry about "financial aid." Which is mostly just loans at this point.