The Higher Education Bubble Pt. 2

There's this ever-present myth that we've slashed funding for public education in the US over the last 40 years, but meanwhile we've tripled it in terms of cost per student — and results have been flat: a massive price increase with no positive change to quality.

the number of college graduates has grown faster than the number of jobs requiring relatively high levels of education.

Looking back, there were over 100,000 people in the 2010 census with bachelor's degrees who became janitors. And there were over 5000 with master's degrees who became janitors.

Why is competition lacking in this market? The accreditation system. It’s basically a government sponsored cartel, where the incumbent businesses get to decide who's going to compete, and how they're going to compete. This is why the last entrant into the top 10 was over 100 years ago (Stanford).

We’ve recreated the healthcare system by basically moving to a system of 3rd party payer, where people basically don’t have to pay for it themselves, because there's so many subsidies directly and indirectly built into the system that it breaks down all accountability from consumers.

Harvard, Yale, and Princeton, receive hundreds of millions of dollars annually in benefits directly or indirectly from the federal government, not only in direct financial grants for research but indirectly through special preferences granted by the tax code.

Further, non-accredited universities don't benefit from tax breaks and federal subsidies & loans so it's hard to compete.