Originally Posted by Bostonian
Originally Posted by Wren
I agree with Bostonian. Although at the rate of tuition acceleration, I am estimating 150K per year in 8 years for an top college.
That looks high. College costs have been rising faster than inflation by about 2 to 5% a year. Assuming a general inflation rate of 2% and college inflation rate of 7%, the $60K cost today would grow "only" to $60000 * (1.07^8) = $103,091 . A college inflation rate of 5% (slightly higher than recent college inflation) results in a future annual cost of $88,647. Here is some data from the College Board.

And these figures assume that current trends continue... which, clearly, they cannot. The market is already pushing back.

Colleges got into an arms race with each other, based on more buildings and expensive amenities, fueled by expanding debt, which could only be repaid by the constant expansion of the student body, and its willingness to take on increasing debt that cannot be discharged. Obviously, both of these forces would have to reach a limit. The business model was unsustainable.

The important thing, though, is that the school presidents all enjoy seven-figure salaries and generous severance packages as they're driving their institutions over the fiscal cliff.