The decline of the American system of higher education has many causes, several of which I have catalogued over the years, but one of the most popular reasons is overstated: cost. Higher education in America is becoming more affordable, as the laws of supply and demand are turning a crisis into a manageable problem.

As college became more expensive in the decades before and just after the turn of the century, students and their families adjusted. Many opted for a cheaper version of the basic product, such as state schools or junior colleges. Others went to vocational school or did something altogether different. In response to these market pressures, colleges have responded by making their product cheaper, as outlined in a new report from the College Board.

There are a lot of numbers, but here is the comparison I find most impressive: Adjusting for grants, rather than taking sticker prices at face value, the inflation-adjusted tuition cost for an in-state freshman at a four-year public university is $2,480 for this school year. That is a 40% decline from a decade ago.

Even for private schools, the pressures have abated. The current net price (on average) is $16,510 a year, as compared to $19,330 in 2006, again inflation-adjusted. This isn’t cheap, but it is a movement in the right direction. And it stands in contrast to all-inclusive sticker prices that are approaching six figures per year at some private colleges.

As might be expected, the trajectory for student debt is down as well. About half of last year’s graduates had no student debt. In 2013, only 40% did. That famous saying from economics—if something cannot go on forever, it will stop—is basically true. Due to changes in the formula, aid for Pell Grants is up, which helps to limit both student debt and the expenses of college.

Of course, it would be wrong to think that all is well in U.S. higher education, especially when it comes to more pedagogical or ideological matters. From a purely pragmatic standpoint, however, it’s worth asking whether lower prices and les revenue will harm the quality of education.

That is a valid concern, and there likely have been declines in quality. But again, various adjustments kick in to limit the scope of the potential damage. Rather than cutting classes in computer science, a university might decide (as mine did) not to field a football team. Or a school might rely less on full-time professors and more on adjuncts. That is often a negative, but again schools can and do adjust, for instance by paying their adjuncts more and putting more effort into finding and keeping the good ones. A school might also reduce courses that attract few students and put more emphasis on subject areas with high enrollments.

Granted, none of this is ideal. But such adjustments can keep much of the damage at manageable levels. Many schools also are easing off their DEI bureaucracies.

And students will make adjustments of their own. If their classes give them less than what they want, they may turn more to the internet—to online education or, these days, AI. To argue that a large-language model is not as good as a professor is to miss the point. These innovations only have to make up some of the marginal deteriorations of quality.

In short, U.S. higher education is muddling through. However slowly and inefficiently, it is restructuring and reshaping itself to be ready for leaner times. The best way to understand most sectors is to focus on the smaller changes behind the scenes, rather than the periodic scandalous headlines.

The system still faces huge challenges. An aging population will bring more competition for public resources, and the potential enrollment pool is likely to decline: Foreign students, especially from China, are not going to save the day.

Still, when all is said and done, the current model is proving robust, even if it needs to be far more innovative. Its advantage is that it offers acculturation, social life, a dating service, professional certification, some drinking and maybe even a bit of learning—all bundled into one service. However strange that may sound, no viable competing products have yet emerged.

Given the extent of the subsidies it receives, higher ed is not exactly passing a pure market test. But it is a test of some kind, and it is likely to be what the U.S. carries forward into its educational future.

Tyler Cowen is a Bloomberg Opinion columnist, a professor of economics at George Mason University and host of the Marginal Revolution blog.

This article was provided by Bloomberg News.