Degree Inflation Of Another Sort

by Patrick Appel

Niraj Chokshi looks at the data on education costs:

For 27 of the past 30 years, the price of education has grown at a faster rate than that of medical care. Education also grew faster than inflation for 29 of the past 30 years, while medical care beat inflation 27 of those years. Could education be our next health care crisis? The answer is probably no, at least not for a long time. Average spending on medical care was between three and four times more than that of education in any given year from 1984 to 2007, the only range that the Labor Department's spending data was available. In 2007, the average consumer unit, similar to a household, spent $2,853 on medical care and $945 on education.

Ezra Klein asks:

I'd like to know what experts think is driving the numbers. Is this hiding a relatively benign story, in which a lot more people are going to college, or graduate school, or even just choosing a private school? Is it just the cost of human labor rising quickly? Or is it more problematic? Or both?

On top of Ezra's questions, I'd like to know about how the decline in housing values might impact this upward trend in education. When housing was going up, poorer homeowners could borrow against the cost of their home to help pay for their kids to go to college. The poorest among us probably won't be much affected because they likely didn't own a house in the first place, but the lower middle-class and middle-class of America could take a hit.