The law of supply and demand dictates that when prices rise, demand shrinks. Yet, demand for college education post-WWII seems to be inelastic (meaning that demand does not seem to react to increases in price), has only increased, despite the four-digit increase in tuition and costs that has been leveraged to the tune of $1.7 trillion in student loan debt as well as an additional $98 billion in parent PLUS loan debt.
However, recently, there are growing indications of a potential shift in taste (shifts in taste in economic theory can have quite an impact on demand) amongst prospective college education consumers. In a recent Gallup poll, 46% of parents said they would prefer not to send their children to a four-year college after high school, even if there were no obstacles, financial or otherwise.
Furthermore, the view Americans have toward colleges has been waning since 2012. A growing percentage of American adults believe that colleges are having a negative overall effect on the United States, as reported in Pew Research polls.
Additionally, in 2018, prior to the holistic COVID-induced disruption to higher education since March 2020, Pew researchers reported that 61% of Americans believed that American higher education is headed in the wrong direction, and for the following reasons:
Now amidst the fourteen month long (and extending) COVID-induced disruption shifting college educations online, yet with no discount in tuition concomitant with a reduction in the overall quality of the college product, sending millions of 20-somethings back into their childhood bedrooms, barred from the usual coming of age process inherent in modern college life, confronted with cancelled internships, thus delayed professional development, may have only exacerbated dismay about the quality and value of a college education.
FInally, given that a smaller cohort of youth will mature into college age in the coming decade, demand for college could likely be peaking in 2021, a possible watershed moment ushering in a period where those students still seeking a college degree may have greater choice and leverage as the multi-generational “chase” for admissions finally comes to a close.
For more information about how Creative Marbles experts can help students and parents navigate and find value in the new normal of education, contact us