William Baldwin suggests a USA education bubble may be about to burst (The Scary Economics Of Higher Education, Forbes, 15 January 2013). He points to US universities and colleges investing in new campuses and buildings, funded by tax-exempt bonds. Baldwin suggests that also surplus educational places could drive down tuition fees to the point where educational institutions can't service their debts. While not as large as the previous the housing bubble, Baldwin suggests this is similarly caused by government subsidies and tax deductions encouraging over investment. Individuals encouraged by government policies, are also investing in education which does not lead to jobs with high enough wages to pay back their loans.
The other risk pointed out is from on-line education providing low cost or free courses. Baldwin suggests that on-line courses do not provide the social experience of a campus, but my recent studies of education suggest that there are ways to provide the collegiate spirit on-line, with blended courses. University campuses are changing to look more like a mall, airport business lounge and a leisure center. Australian universities are turning their libraries into learning centers and providing on-campus accommodation and entertainment facilities, backed by private investment. There are fewer traditional lecture theaters being built, but labs and places for learning circles to meet are in demand.
Baldwin suggests a blended four year degree, with a 50% split between on-line and on campus study. I suggest this is more likely to be 75% on-line or more. The typical student will do most of their study on-line, visiting a campus only for essential lab sessions and intensive workshops. They may get together with other students, at a local learning center of a public library or a coffee shop.
One curious suggestion by Baldwin was the threat of the "European" three-year degree. Presumably Australia's three year degree and adoption of the European style Bologna Process for higher degrees would also be a threat to US institutions. However, the low US dollar may cushion US institutions from overseas competition, at least from Australia.