Deleveraging Education

So...

We are in for an interesting few years seeing the world economy doing a massive re-evaluation of itself. See this clip for a very simple explanation of part of the source of the problem.

One interesting point I saw mentioned on TV last night was how fast the cost of education has escalated. It has risen far quicker than oil or medical costs.

Why?

Well, the explanation given in this discussion makes a lot of sense. Supply, Demand.

Lots of people want a higher education. Banks and Governments make getting loans for that education very easy. Charitable People give generously to funds that provide bursaries. So demand is very elastic. Whatever the price, people suck it up and pay. Universities know this so they raise the prices higher.

And they can. Because people will pay.

Hmmm, I am all for supply and demand setting the true value of something. But... is that the case here? Easy credit and a `moral good' lead to run away inflation.

We are all likely going to have to suck it up and stop borrowing for things. Buy only what we can afford to pay for.

Education seems to be the one that hardest to accept. But, if credit wasn't so easy... would universities still say no to the best and the brightest? Or would they drop tuition to the point where more people could afford to study and pay it off working part time?

I for one can't see how ridiculously high prices can be justified when Education is for all intents and purposes free now (via the Internet). All we are paying for is each others company and a piece of paper with a seal.