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51 U. Louisville L. Rev. 177 (2012-2013)
Comparing the Education Bubble to the Housing Bubble: Will Universities Be Too Big to Fail

handle is hein.journals/branlaj51 and id is 183 raw text is: COMPARING THE EDUCATION BUBBLE TO THE
April A. Wimberg*
History shows us that markets are largely cyclical and, over time, many
traditional investments become obsolete or lose some of their luster, at least
temporarily.' This phenomenon is not limited to equities traded on Wall
Street, but exists even in the most traditional assets.2 A perfect example of
this trend was the recent dramatic collapse of the U.S. housing market. As
a result, Congress has implemented far-reaching legislation to protect
investors and taxpayers from another investment bubble.4 Even in the face
of this expanded protectionism, Washington has turned a blind eye to the
bubble that has developed in the higher education market,' which eerily
shadows the characteristics of the housing industry.
Historically, both higher education and home ownership have been
associated with higher economic status; consequently, the government has
encouraged both of these classic American dreams for several decades.
* J.D. Candidate, May 2013, Louis D. Brandeis School of Law, University of Louisville. Before
law school, the author worked for eight years in investment banking in New York and also served in the
Peace Corps, working with microfinance institutions in Cameroon. She would like to thank her
husband, Michael Wimberg, for his endless support.
FINANCIAL CRISES 38-41 (Basic Books, Inc., rev. ed. 1989).
2 See Ron Derby, Bust May Follow as Gold Hits $1500, Bus. DAY (Apr. 21, 2011),
http://www.businessday.co.zalarticles/Content.aspx?id=140905 (explaining the fall of gold prices in
See Mark Landler, U.S. Housing Collapse Spreads Oversees, N.Y. TIMES, Apr. 15, 2008, at Al,
available at http://www.nytimes.com/2008/04/13/business/worldbusiness/13iht-housing.1.11931770.
html?_iI &pagewanted=all.
4 The Dodd-Frank Wall Street Reform and Consumer Protection Act's stated purpose is [t]o
promote the financial stability of the United States[,] . . . to protect the American taxpayer by ending
bailouts, [and] to protect consumers from abusive financial services practices. H.R. 4173, 111 th Cong.
5 Congress passed several acts with only the merest pretense of making higher education more
affordable, yet no real changes were made to the system. See, e.g., Health Care and Education
Reconciliation Act of 2010, 20 U.S.C. § 1071 (2006) (addressing only loan forgiveness opportunities for
a small group of students).
6 See Community Reinvestment Act, 12 U.S.C. § 2901 (2006) (encouraging investments in
housing); Higher Education Act of 1965, 20 U.S.C. § 1001 (2006) (encouraging investments in higher


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