Interesting article! But two corrections are in order:
"it is not like very many rich people have three apartments" - oh yes, they absolutely do - "or take nine years to finish undergrad" - let me tell you about a time and place in Europe that had effectively removed education scarcity with free college for everyone. People lurking in (sometimes multiple) degrees for close to a decade was so common that there was a word for it. Not that that was a terrible place to live, quite nice actually.
I have close friends in Germany who worked on multiple degrees for years without progress. While I personally don't see that as ideal life choices and they would agree, it actually came at very little cost for the university. The reason they took so long is because they were hardly studying. This also means not submitting homework, usually not coming to lectures and taking up space there and more often than not, not even attending the exam, so there was nothing to grade either. In the case of my friends, it turned out the degrees they focused on initially weren't right for them in the end. But they were able to realize that on their own time and settle for something that suits them better and despite that aren't stuck with crippling debt.
Working on the side was a big factor why people put less time into their studies. As waiters, in jobs actually relevant to their degrees (especially engineers), or administrative jobs in companies. I couldn't really name any way how that would have hurt the economy or the universities. But the US economy has been and is far more dynamic, so maybe it does have some impact.
I think there are lots of reasons the US economy is more dynamic, but I don't think expensive university is it. Hiring and firing is easier/faster. More freedom for businesses in general. The rural area in Germany where I grew up in had no McDonald's because you somehow need permission from existing businesses to open a competitor. I don't fully understand this, but would lose all composure if this craziness were to stop me from opening a business. It's also easy to underestimate the massive boost that comes from a huge, trustingly homogenous market. I build a web app business in the US and there are 350 million customers right there. No need to translate into a bunch of languages, advertise in a bunch of languages. Regulations between states might differ, but there usually are solutions already in place because so many businesses have the cross-state issues (taxes or whatever).
Doubt that has anything to do with the dynamism of the US economy - that’s all due to the US being much more business friendly, market size, few employer regulations, immigration, cultural values around entrepreneurship and dreaming big, a more level playing field, etc
What cost did they create? Their parents paid for their housing and food. One of them later made money doing tech support jobs at the university and after finally graduating through that got jobs in IT.
Other than being enrolled and going to 2-3 lectures in a hall with 100-200 students at the beginning of every semester they didn't use any services provided by the university.
"it is not like very many rich people have three apartments" - oh yes, they absolutely do - "or take nine years to finish undergrad" - let me tell you about a time and place in Europe that had effectively removed education scarcity with free college for everyone. People lurking in (sometimes multiple) degrees for close to a decade was so common that there was a word for it. Not that that was a terrible place to live, quite nice actually.