Inflation of Education vs. Ordinary Prices

The above graph, linked to from inflationdata.com, shows how the rate at which higher education has been increasing in cost vastly outstrips the rate for everyday items. Many factors have unduly inflated the cost of higher education, not least the ready availability of government loans to fund education and thus subsidize, and even encourage, educational institutions in raising their prices.

This disparity between education inflation and ordinary inflation has now even been indexed by contrasting the CPI (consumer price index, which is based on a basket of ordinary goods) with the HEPI (higher-education price index, which is based on the cost of higher education — see commonfund.org).

All this suggests that the market for online and distance education will skyrocket in coming years as the benefit of a campus-based education recedes in the face of ever-increasing debts that students and families incur when they go the traditional campus-based route.