[jmm]

I think there are different facets to the bubble that need to be separated out to talk coherently about its implications...

You can look at the bubble from the vantage point of the schools that are competing to keep up with the spending of the ivys and have overextended themselves: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a...

And you can also look at it from the perspective of the students that are emerging from mid or low tier institutions with a hefty chunk of debt relative to their likely earning potential.

Peter's (or Sarah's) focus on the Harvard kids seems to be the least compelling part of a potential education bubble. These are smart kids who either leave school with no debt in the case that they are poor to lower middle class, and with parental support (of the monetary kind) if they're on the other side of the wealth spectrum. So maybe they're "wasting" four years where they could be creating a business, but they're not in dire straights upon graduation or necessarily compelled to sell their souls. Check out Harvard's financial aid policies: http://www.admissions.college.harvard.edu/financial_aid/hfai...

I do think there needs to be some different paths put before kids in general as they contemplate "college as the only option" but I don't think Thiel is quite right to target the ivy kids as they have the least reason to fear an education bubble bursting -- because of the lasting [perceived] quality of their degree, their lack of debt in a lot of cases, their campus-born connections to smart and wealthy classmates and alums, and their smarts.