Pop quiz: why does college tuition get more and more expensive each year? Answer: because it can.
Jacob Goldstein of NPR explains the why the "sticker price," that is the full price colleges list in their brochures, keep on increasing while the "net price" has stayed relatively constant (the difference is attributable to scholarships and grants): Link
But what happens if you don't qualify for those scholarships and grants? You have to borrow, which explains the crazy growth of student loans that mirror the growth in college tuition.
Daniel Indiviglio of The Atlantic noted that student loans have grown 511% since 1999 - that's 6 times the rate of the housing bubble.
Of course the big question is: will the student loan bubble pop just like the housing bubble? Though there are parallels between the student loan and housing, Andrew Hacker and Claudia Dreifus of The Atlantic noted one big difference:
With mortgage defaults, banks seize and resell the home. But if a degree can't be sold, that doesn't deter the banks. They essentially wrote the student loan law, in which the fine-print says they aren't "dischargable." So even if you file for bankruptcy, the payments continue due. Hence these stern word from Barmak Nassirian of the American Association of College Registrars and Admissions Officers. "You will be hounded for life," he warns. "They will garnish your wages. They will intercept your tax refunds. You become ineligible for federal employment." He adds that any professional license can be revoked and Social Security checks docked when you retire. We can't think of any other statute with such sadistic provisions.
So I guess you wouldn't mind if the health professionals who take care of you and your loved ones, the teachers who teach your kids, or the accountant who helps you manage your fortune didn't go to college?
Education is a social necessity, not an individual luxury.