The college tuition phenomenon is an example of a very weird bubble. Of the hundreds of well-studied economic bubbles, there isn't one quite like it. I'm fairly comfortable saying that it's impossible to predict when it will go down. It could happen next year, or not until 50 have passed.

We know that education itself is of multi-trillion-dollar importance. It's the difference between stagnation and growth and, for a society, progress and failure. How people think influences what they do. By and large, most people are underprepared for the problems and complexities of the future. People talk about the Singularity and Strong AI but, if you've actually read some corporate source code, you become a bit more pessimistic. 95% of paid professional programmers can't even write shitty business apps well.

So that's Weird Thing #1 about this bubble. It involves something that actually is very important-- not gold or tulip bulbs or stock in silly companies.

Of course, you don't need to spend $160,000 on an elite college to get a decent education. That gets to the real reason people are paying so much.

We also know that social connections matter for personal position. It's a zero-sum game and it's shitty that we have to play it, but if you don't get the "who you know" game in order, then you can't make use of what you know, and you become yet another bitter, smart underachiever. That's even more miserable than being a regular, ignorant person.

That's Weird Thing #2 about this education bubble: it pertains to a social need that many people feel intensely and experience bitterly. If those Ivy League colleges are delivering on connections, they're probably worth $160,000. Which is why they get away with charging that much. They could probably triple it, were it not for the image problems of drawing attention to the socioeconomic issues. (They wouldn't actually make themselves unaffordable at $120k per year, because they'd be offering a lot more financial aid except to the very rich. However, putting the full-price level at that point would draw negative secondary attention.)

The tuition bubble is about the social connections. Do not be deluded on this. Education is a secondary concern in all that, especially when we're talking about private pre-schools where the quality is ancillary: it's about the "feeder" effect. How did degenerate connection-seeking get conflated with education? We have a weird superego in our society that says that the best way to spend ages 18-22 is to live in a way mirroring how the upper class wants to perceive itself, as opposed to how it actually is (see Xoxohth for that, because while most of its posters are not upper-class themselves, they have U.S. upper class attitudes down). College, for most Americans, is this period of making connections that involves courses because of that ghost of a superego that says we're supposed to find those things important, especially if we want to run the world. (The actual people who run the world are uneducated, ignorant garbage, but I'll step over that issue for now.)

MBA programs are more brazen about this. It's a regular thing for an MBA professor to reschedule exams to accommodate student travel and social events. Top MBAs are the only educational program (to my knowledge) where professors are virtually required to accommodate students' social calendars.

So why is tuition high? Education is important to society, even at those ridiculous price levels. However, the price is mostly paid by the individual (well, parents) and that is because of the connections.

I don't think anyone can predict how this will play out. Escalating economic inequality increases the importance of social connections, which means that more money is going to get sucked away in the search for them. Expensive, reputable colleges are (a) the most socially acceptable way to turn money into connections for young people, and (b) a socially acceptable way to transfer wealth across generations. That isn't going to fade out just because we've found better ways of disseminating information on the Internet.

Don't get me wrong: online education is going to be quite powerful, and we're going to see some awesome progress in the next decade or two, but this extremely profitable (for some institutions) pattern of social-connection seeking is not going to disappear just yet.