Originally Posted by JonLaw
Originally Posted by Dude
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.

I will note that the demand for debt from consumers is basically infinite.

The problem is that only *some* people will be willing to take on an infinite amount of debt.

For example, one of my law school roommates, who, between two years of Harvard grad school and three years of Duke law school, managed to actually max out the amount of money that he was allowed to borrow.

He would have kept borrowing more, but he hit the ceiling.

So, part of the issue is that the amount is capped.

There's always a cap, because at some point the lender loses confidence in the borrower to repay, and if the lender doesn't lose confidence quickly enough, default. It would be somewhat difficult to keep up with the interest payments on $infinity, nevermind pay down the principle.

Otherwise, you can't expand the student body AND increase their debt load, because those two forces work against each other.