Is private school the next bubble?

[Anonymous]

It has occurred to me.

Consider:

it's a commodity that people pay increasing amounts for;

whose value no one questions because it has always provided good returns (to children's futures) in the past;

that people believe is a fundamentally good investment despite some indications that they could do as well without it;

that people keep signing onto for fear that if they don't sign onto it then they (their children) will have missed their chance;

for which people are willing to go into significant debt.

It does sound a little like the housing market in 2005. What would a "crash" look like, though? Like kids not getting into good colleges, or not coming out well educated, or what?

[Anonymous]

I hope!

[Anonymous]

I don't see the crash part because the money isn't backed by a lending institution. My only guess would be a larger recession (think Great Depression) in which no one can afford it. I think it would take something VERY drastic for this crash. In which case, we will be self-educating all together.

[Anonymous]

Interesting article, at the level of law school though not private school: http://www.abajournal.com/news/article/how_long_can_the_law_school_bubble_last/

[Anonymous]

Anonymous wrote:I hope!

WTF??!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hope!

WTF??!!

By "I hope!" I meant that I hope private schools administrators realize that tuition is getting to be unsustainable and that tuition prices stop increasing. There are a lot of families in the $150-400k HHI who sacrifice to send their kids to private schools at $30k per child. If prices keep rising to $40k, many of these families will be priced out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I hope!

WTF??!!

By "I hope!" I meant that I hope private schools administrators realize that tuition is getting to be unsustainable and that tuition prices stop increasing. There are a lot of families in the $150-400k HHI who sacrifice to send their kids to private schools at $30k per child. If prices keep rising to $40k, many of these families will be priced out.

I think that if families making $150-400K -- the top 5% of earners in the country -- find themselves struggling to pay for it, then it must be a bubble.

[Anonymous]

I think its more likely that as the price increases and demand remains, more private schools will open. Prices may stabilize, but I doubt so many schools would open that existing, financially stable schools would be unable to attract high quality teachers and students.

[Anonymous]

I don't think the demand will remain if the prices increase. Only the very rich and those who qualify for FA will be able to afford it. If you lose the middle (ie, those that pay full tuition but with sacrifice, which I would guess compromises at least 25 and up to 50% of the average private school), it will cause tuition to go up even further for the very rich and will leave even less FA available for those that can't afford it.

[Anonymous]

This same question has been posed for the last at least 4 years on this board with the speculation that it has to happen soon. I think its just wishful thinking more than anything.

[Anonymous]

Watch the financial aid % at the school. I noticed at a local private school that there aid % continue to increase. I also know that the local public school has seen an increase on students and they think it is because of kids transferring out of private school.

You might see more schools close. If the recession the schools increasing aid and not filling there seats will struggle as the more elite schools pull in the kids who would have gone there and more full pay parents.

I think suburban parents are more likely to pull their kids out and try the public schools.

[Anonymous]

Anonymous wrote:I think its more likely that as the price increases and demand remains, more private schools will open. Prices may stabilize, but I doubt so many schools would open that existing, financially stable schools would be unable to attract high quality teachers and students.

What may happen though is that the schools that have relied on their reputations but are now on shaky financial grounds will start eliminating staff positions and postponing capitol improvements. When that happens it will be obvious to new applicants that the school is going downhill and they will choose another school that appears more together. My DC is at such a school now, I don't trust that school is doing it's best to educate my child. It appears they are doing everything they can to stay afloat. And it isn't pretty.

[Anonymous]

I see private schools slowly reducing the years they offer all the time. There is one school near us that has only 4 children per grade so they have to combine grades to 8 per class but wants all the preschool parents to make up in fees for all the elementary spaces that are unfilled.

[Anonymous]

Enrollment numbers, kids per grade, classes pee grade are good ways to see how a school is doing financial.

[Anonymous]

The fact that there are so many financial aid threads and threads asking whether private school is worth it may indicate that many families are feeling financial pressure.