If higher education turns out to be the next big bubble, the Bay State is toast.

Yet there is growing reason to hope our state’s powerhouse collection of universities and colleges, the collegiate capital of the universe, might just dodge this bullet after all, contends Howard Horton, president of New England College of Business and Finance.

In 2009, Horton teamed up with a former Bentley University president to pen a piece in The Chronicle of Higher Education that helped inflate the bubble argument.

Horton’s hardly recanting. But two years and one very brutal recession later, he now argues that American higher education, especially here in Boston, has shown a surprising resilience.

If so, it’s good news for a local economy for whom higher ed is an economic driver – from the construction of new dorms to the annual multibillion-dollar bonanza of federal research grants.

“What I have observed is a particularly resilient industry,” Horton notes. “There really hasn’t been a large-scale closure of colleges.”

Ah Ha! Moment

A chorus of critics has been warning for years now of the growing chasm between ever more obscene college tuition costs and stagnant family incomes. And when Horton penned his piece, things looked pretty grim indeed for higher education.

Harvard was still smarting after losing billions in endowment money in the stock market, and had stopped work on its giant science complex in Allston.

Across the Boston area, everything from dorm projects to new classroom buildings were put on hold, delivering a painful blow to an already reeling construction industry.

And along with the hit to their endowments, colleges faced another crisis as well.

A growing number of middle-class households were unable to foot the annual $50,000 bill for tuition after getting hit with a layoff or being handed a big pay cut. The collapse in housing prices, which had wiped out billions in equity that had paid for many a college education in the past, simply compounded the problem.

Suddenly, the whole idea of forking over $200,000 for a four-year degree from some middling private college started to seem downright insane, especially with a job market that was going in reverse. It almost seemed like that “Ah Ha!” moment of realization, similar to the one that came near the peak of housing bubble, when tales of $1 million fixer-uppers in Newton or Wellesley abounded.

We all know what happened with the housing market – In some parts of the country, we have seen a collapse in prices unequalled by even the Depression years.

But instead of collapsing, the higher education industry has muddled through, Horton noted.

There have been relatively few private college shutdowns, while college endowments have rebounded from their 2008/2009 lows, letting some long-delayed projects move forward. Colleges, unlike many businesses, have “collapsible costs” that can allow for a relatively quick adjustment based on current conditions, Horton said. There is also a growing embrace of technology – through online courses – that also promises to reduce costs for students while boosting revenue as well. And public education, despite state budget cuts, has seen an inflow of students that is causing enrollment to surge.

Structural Problems? 

Most importantly, the public has not yet lost complete faith in higher ed – in stark contrast to the way public opinion has so spectacularly soured on the housing market.

While it would be a stretch to say we are coming off a blue-collar recession, unemployment rates for those with college degrees hover in the 4 to 5 percent range, half the national rate, according to Horton.

And the federal government may help keep colleges afloat for years to come with policies aimed at encouraging more people to get degrees. In particular, the Obama Administration is a big booster of higher ed, having laid out long-term goals to boost the percentage of Americans with some form of college degree from 40 percent to 60 percent of the national workforce.

But let’s not get too rosy, here.

Critics warning of a higher ed bubble are, if anything, just starting to hit their stride. The Economist this spring printed some scathing pieces that pumped more hot air into the idea of a higher-ed bubble, while a California entrepreneur is paying the best and brightest students to drop out of elite colleges and pursue their ideas for new businesses. 

If faith in the economic benefits of a college degree hasn’t yet been shattered yet, at the very least colleges should ignore mounting discontent about high tuition costs at their own peril.

Moreover, all those students flocking to community colleges and public universities are certainly leaving seats empty at pricy private colleges. But that is likely to cause structural shifts, not a complete meltdown of higher education.

Right now, the only bubble to have burst is in real estate. Let’s hope it stays that way.