With apologies to Peter Thiel, Tyler Cowan believes U.S. higher education is going to muddle through:
Adjusting for grants, rather than taking sticker prices at face value, the inflation-adjusted tuition cost for an in-state freshman at a four-year public university is $2,480 for this school year. That is a 40% decline from a decade ago…
As might be expected, the trajectory for student debt is down as well. About half of last year’s graduates had no student debt. In 2013, only 40% did. That famous saying from economics — if something cannot go on forever, it will stop — is basically true. Due to changes in the formula, aid for Pell Grants is up, which helps to limit both student debt and the expenses of college.
The bigger long term problem is the declining number of white 18 year-olds. The decline is absolute, not relative. They are the primary consumers of college. So fewer students means fewer colleges, especially small, private, liberal arts colleges.
The good colleges will survive, and many of them might thrive. The bad colleges also might survive, but only by converting to essentially open admissions.
Of course the elite schools like the Ivies and some public schools will thrive, because one of their functions is to network the children of the Ruling Class, so that they can take their rightful places in society. One thinks of Medieval kings fostering the sons of the nobles.