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It comes down to at least two things:

1. Easy (to acquire) debt drives demand

2. Education is still "Made in America" thus it cannot hide from the real devaluation of the dollar



> thus it cannot hide from the real devaluation of the dollar

The trade-weighted U.S. dollar index [1], published by the Board of Governors of the Federal Reserve, shows a 1.2% annualised decline in the U.S. dollar over the past 10 years. This is sufficiently low and hedge-able as to not be a key determinant in this pricing process.

Your broader point stands, however. Education is a non-tradable good. This amplifies the effect of local idiosyncrasies, e.g. non-dischargeable federally-backed education loans, in a way which would be arbitraged away for a tradable good.

[1] http://research.stlouisfed.org/fred2/series/TWEXBp




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