One of the major benefits of attending a four-year university is the amount of different people that one will come into contact with over their time there. The average American student attends public schools during their youth and adolescence. The average American student develops a limited network of friends and acquaintances at public schools. Most attend school with the same individuals or a least a high percentage of the same individuals, especially in small towns and rural areas, throughout their K-12 education. Therefore, the chance to meet and be educated with different individuals not only from around your state but also from around the world has pecuniary benefits which are not easily measured but, can be easily sold to students and parents as part of the university experience.
Universities use the campus, an area of the town they are located in, as a place to build a mini-society of students and faculty. They are a lot of added benefits to this approach, difficult to say how many of them add value to the degree, and how much value. Also, the construction of a university campus is expensive. The costs of construction and maintenance of the campus are enormous and are reflected in the fees charged to the students who attend the university. Fees are rising. It is typical for the fees from one semester at a university to be equivalent to the cost of taking another class. The cost of a three credit hour course is around $1000 at most public universities. The rising cost could be attributed to rising costs of utilities OR it might be attributable to the rising cost of construction of new buildings going up at universities nation-wide.
A recent article got me thinking about this issue. In the expose, a univeristy I have never heard of, High Point University in North Carolina is introduced. The headline "Bubble U: High Point University." There has been much ado about a high education bubble. Critics cite rising student debt, just over $1 trillion in the aggregate nation-wide, and the less than encouraging job market for new graduates, 50% are either unemployed or underemployed. The expansion of university campuses is based on the notion that attendence will continue to increase and that tuition & fees will do the same. High Point is perhaps the biggest gambler on the previous notion. Here is a snippet from the article,
"Some $700 million has already been spent to refurbish and expand the campus. Enrollment is up 50 percent, to 3,700, even as tuition and room and board have soared 60 percent, to $37,800 annually. Students’ average SAT scores have ticked up almost 10 percent."
If their is a bubble in higher education it will most likely be the case that the expansion of campus financed by borrowing will suffer the same fate as many of the half-built or abandoned home constructions that plague cities like Las Vegas. What's interesting about the article on High Point is not that they are ferciously expanding the size and scope of their university but rather that they are getting their financing from BB&T, a bank that did not get heavily invested in the property bubble of the mid-2000s.