Though many commentators have expressed skepticism over the
future of traditional higher-ed, at least one group anticipates a bright
future: real-estate developers. The Wall Street Journal reports today that some
of the largest developers in the
The article cites industry analysts who are concerned that some developers are overbuilding and that the supply of dorms will soon outstrip the demand. These companies, however, are unfazed by such predictions. As one developer put it, they are simply "catching up in creating supply to keep up with demand." Given the seemingly unstoppable growth of the higher-ed industry, he may be right.
While it is true that guaranteed federal loan programs push too many students into college and thus abet the growth of subpar institutions, there are broader effects as well. Indeed, this piece suggests that the ballooning of higher-ed is leading to unsustainable growth incertain sectors of the real-estate market. We might even say that the higher-ed bubble has spawned a smaller higher-ed housing bubble. To that end, when the former bursts - as it undoubtedly will - the latter will quickly follow.
The consequences of not reforming our higher-ed system, therefore, are growing. The economic pain we will experience when our colleges go under will be compounded by the damage caused by subsequent decline in the real-estate market. Unless gradual change begins soon, the federally-guaranteed funds offered by consumers of higher-ed will ensnare even more sectors of our economy.