Private College Admissions Bubble

vienna_man
Sat, 12 Apr 2008 12:36:12 +0000

I am wondering if this is the year that Private College Admissions finally experiences its long awatied bubble as the recession pulls down parent’s ability to utilize home equity and borrow in general, as costs for the typical 50% of freshman who pay full boat fees exceed $50,000 (with another incresse beyond the rate of inflation), and as endowment values plummet along with the stock market. Also, with student’s diminished job prospects, I don’t see how many of them will continue to be willing to accumulate debt from even federal programs. Also, many schools are denying AP credits they routinely gave for high performance even a few years ago, further diminishing parent’s ability to cope with rising costs. With higher gas and airline ticket prices, travel beyond local areas to attend schools will drop too.

I just don’t see how even very good private colleges will be able to buck a trend which will be away from them for state schools, and as the number of parents willing to pay full boat diminishes, I see financial aid for the 50% who are on the other fortunate end of the “Robin Hood” equation going down too.

I think yield rates first and subseqnently applications themselves are about to collapse. Much like mortgages taken out that people can no longer pay, the commitment to private school education can simply no longer be funded.

Outside of a handful of elte schools (for instance,Edmund Fiske’s elite 13 universities and 12 liberal arts colleges) I think the rest of the private school world is set for a major fall. Any thoughts?