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A lot of people used to think about college the way a lot of people now think about protein: good for you in any quantity, and the more the better. How times have changed.
Not only is the share of people who see college as a worthwhile investment in decline, but some smaller schools are digging into their endowments to stay afloat. Even popular and established schools like Syracuse are falling short of enrollment goals and facing a budget crisis. It is all leading to speculation that higher education is a bubble that is about to pop.
That’s unlikely. College is less like an overvalued stock about to crash than an expensive bond due for a repricing. In the meantime, it will still make payments.
American universities face many challenges. First, the numbers aren’t in their favor. In the postwar era, each generation was larger than the previous, and more people from each generation wanted to go to college. International students were also willing to come to the US at almost any price. Now those sources of growth are exhausted. Enrollment in a four-year college has been steady, about 40%, for more than a decade. Future generations are smaller, and there are fewer foreign students.
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Allison Schrager is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and a Bloomberg Opinion columnist.