People with large amounts of debt demand high salaries (because they have to pay the debt) .
The bubble would burst when companies realize that they can pay someone who went to a trade school/bootcamp much less money, for a similar quality of work than that produced by the people with expensive degrees.
It is already starting to happen, with the insane amount of bootcampers that have appeared only in the last 3 years.
What is the market going to look like 3 years after NOW, when supply has glutted to an even more ridiculous degree?
(My experience is in the tech markets but I see no reason why this couldn't be the case for other job markets. We are the canary in the coal mine of what is to come )
Well, what will happen is that the market for new grad jobs starts to plummet, and all of a sudden those people who paid 200k are left with a fancy piece of paper, and no high paying jobs.
THEN is when things get even more interesting. Now these people with no high paying job start becoming unable to pay back their loans... At which point the whole thing comes crashing down.
The bubble is not just the college degree. It is the market and loans BEHIND the expensive piece of paper.
If Americans could be replaced with outsourced people who do just as good a job for a 1/3 the price, then yes, the bubble would have popped.
The reason why that didn't happen is because an American worker really is worth the money you pay them.
With college, maybe the 200K degree DOES actually make you 200K smarter and more efficient.
If that is the case, then the college degree isn't a bubble. It is backed up by actual value.
Private student loans operate similarly and have similar risks. Similarly, you can't _sell_ an education except with a job so if there is even the slightest panic a bunch of people can't pay their loans and the holder of the note can't sell the underlying "education".
Speculators buy assets that they aren't going to use themselves purely to sell it to someone else. If speculators are selling to mostly to other speculators and transactions between speculators starts taking up the bulk of the active market and it starts driving prices up... that's a bubble. What happens is that at some point speculators will panic when other speculators stop buying the asset, and they race to cash out of the asset before everyone else does, except there's mostly other speculators who are also trying to dump the asset on the market...
Those Dutch tulips or 2000-era dot-com stocks are examples of this type of asset. These are assets that didn't have much value except to speculators. (Cf. you can live in or rent out a house, or collect dividends from other categories of stock, or melt down gold, etc.) As soon as there's a price drop... every speculator is terrified of being the last one holding the bag and sees every other speculator thinking the same thing and accurately see speculators as controlling the price and they all race like hell to dump the asset as quickly as possible. The price drops to near zero.
With an education it's difficult to imagine how this sort of thing could happen. In short, it's an exceedingly difficult asset to transfer. You can't sell your education. There doesn't seem to be a conceivable way that everyone would "sell" their education all at once. Also the process of buying an education takes many years to carry out and so doesn't seem so compatible with overnight frenzies. And the value of previously acquired educations doesn't drop if people buy fewer or cheaper ones; it might actually go up instead.
If people collectively decide Ivy league educations aren't worth buying anymore... it will probably be a trend that occurs over a matter of decades.
Just because something feels dumbfoundingly "expensive" doesn't mean that it's a "bubble".