Higher Education Bubble’s Cause?

popping-bubble1Political Calculations says, “[W]e couldn’t help but notice what would appear to be a really unique correlation between the average annual tuition at a four-year higher education institution in the United States and the total amount of money the U.S. federal government spends every year.”

What we find is that changes in the average cost of college tuition closely pace the growth of total U.S. federal spending, and has done so almost perfectly since 1998.

This correlation suggests that the U.S. federal government is directly behind the bubble we observe to exist in the cost of U.S. higher education, with federal spending during years of recession effectively insulating U.S. colleges and universities from the nation’s economic circumstances by subsidizing their operations.

Go read it all.

In a related post they said,

So much for the cost explosion of college educations in recent years being unexplainable.

And you do realize that with this kind of relationship, a tool you can use to predict what the average cost of college will be several years into the future can’t be far behind….

The pictures is from an earlier Political Calculations blog post.

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