Currently there is theory in the U.S that there is a Higher Education Bubble
People in agreement with this argue:
1. That it is incredibly easy to receive a college loan
2. There is a surplus of workers in fields that require higher education, causing more unemployment
3. Because of this increase in unemployment for college graduates, there is then a higher default rate on college loans
4. Wages have not changed with the increase in tuition price, making it harder for graduates to pay back loans
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The Bennett Hypothesis
This hypothesis basically claims that as loans become easier to receive, the more college tuition increases. This is because more loans means more people can attend college. Therefore, these colleges and universities have an incentive to raise prices because they make more money. However, this creates more debt for those who take out loans. More debt paired with higher default rates is not a good thing.
A lot of colleges/universities could go bankrupt.
Argument Against The Bubble
Long story short people argue that data does not support this, as default rates on student loans have decreased since the 80's and 90's.
How this could effect cryptocurrencies?
If this were to cause another financial crisis this would send cryptocurrencies through the roof as many want to use crypto's to hedge against the risk of financial issues throughout the global and national economy.
However, I hope that this bubble theory does not turn out to be true or burst, as recessions are a terrible thing and ruin a lot of lives.
But I do have hope that there could be a way we could apply blockchain technology to tuition and college loans to make things more efficient. If so, maybe it could lower the cost of tuition by decentralizing loans if they were paid in cryptocurrencies instead of fiat currency.
Let me know what you think and how you feel about the higher education bubble!
Source for research:
https://www.forbes.com/sites/ccap/2015/07/21/the-bennett-hypothesis-confirmed-again/#1e6d3d19794a
https://en.wikipedia.org/wiki/Higher_education_bubble_in_the_United_States
I find this to be an interesting phenomenon.
although, I am unsure if that sort of debt swapping would be beneficial to the health of the cryptocurrency, or any currency for that matter. it was practices of this sort that caused, helped cause the 2008 recession.
it is a theory that I am starting to think of, that with the advent of digital currencies, we can do pretty much what you can convince another party to believe that something is worth.
it is a basic assumption of the process of valuation.
it is sort of like we could go out and collect rocks. and that would be worth money, it would get quite deep, might post research as i do it about this theory.
mostly that we can quantify most things with the use of the term "currency" and a representation of said "object" the semantical gymnastics, are somthing i look forward to dealing with.
that is if i you know....do the work. spread the word if you think it needs to?
just some food for thought, might be interesting what others feel about this.
Reality will check in, and the bubble will pop. I'm betting sooner, rather than later. Nice Article.
Thanks, yeah it is the unfortunate truth that recessions occur due to business cycles, so it's only a matter of time until something spurs it such as this.
If the bubble does burst, the government would bail out the institutions, just like big corporate and big banks before. They would have to, the institutions are their indoctrination centers.
True it wouldn't be the end of things just a repeat of last time