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Is the Higher-Ed Bubble Starting to Pop?


A number of schools have been freezing tuition and increasing financial aid in a bid to reverse falling enrollments, but Virgina’s Strayer University may be taking the most extreme step yet, cutting tuition by 40 percent for the next school year. This comes one month after the business decided to close 20 campuses in an effort to keep costs in line. The Washington Business Journal has more (h/t Marginal Revolution):

Strayer will give all new students 20 percent off tuition at enrollment, and is offering a program called Tuition Awards, which will cover the cost of one class for every three a student successfully completes. […]

Strayer said last month it would announce a tuition reduction, a move it conceded would negatively affect next year’s revenue.

Total enrollment at Strayer University for the fall term fell 17 percent, while new enrollments were down 23 percent.

Unlike the elite private and state universities that tend to dominate these discussions, Strayer Education is a for-profit school at the other end of the market. As Tyler Cowen notes, this development looks very similar to the housing crisis, which began on the low end with sub-prime mortgages before spreading to the rest of the market. Is the higher ed bubble beginning to pop?

[Library image courtesy of Shutterstock]

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  • Jeff Pasley

    You might be right, but for profits and online-onlies like this are true bubble institutions in a way that conventional institutions with real campuses and full-time faculty and resident students and proud alumni are not. I do think the bubble is breaking when it comes to higher education as v.c. fodder.

  • Kavanna


    ALL higher ed in the US today is bubble-ish in one way or another: private, public, for-profit, non-profit, whatever.

  • Matt B

    Yes, this does look like the beginning of a correction. If so, VM will be entitled to say, “I told you so”.

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