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> How can the student debt bubble burst and hurt the school? Because for-profit educational institutions don't have large endowments to bankroll them through t
by spamizbad 16y ago
> How can the student debt bubble burst and hurt the school?
Because for-profit educational institutions don't have large endowments to bankroll them through tough times and are completely dependent on revenues from continued enrollment. If student debt becomes more difficult to come-by, and/or the government tightens the criteria for student loans, these schools will see their enrollment drop as a significant portion of their clientèle will be unable to afford their services.
- Retric 16y agoThese for profit schools are the low cost carriers of the education world. Changes to student aid would harm traditional private schools much more dramatically because they have far tighter margins much like how rising fuel costs impacted the Aviation industry. And while federal funds prop up the secondary education system, they can continue to prop up an industry for decades ex: corn farmers. Individually they may be susceptible to loss of accreditation, however without the massive legacy costs they are far more capable of jumping though new hoops. I would suggest rather than being dependent on an unstable bubble they are exploiting the inefficiency’s of an entrenched industry. PS: There is a difference between profiting from a bubble (Home Depot) and being dependent on it (Lehman Brothers).