The Cost of Higher Education — Crooked Timber:
It has often been pointed out that universities and colleges are all trying to be Rolls Royce; no one is trying to be Kia. Existing institutions don’t compete on bottom line cost to students because cutting costs would undercut prestige and these institutions are competing to be prestigious; and, anyway, most students get some financial aid, so cost isn’t really transparent and you have a third-party payer problem, price-sensitivity-wise. Suffice it to say that a number of factors conspire to make it the case that the market for higher ed doesn’t look like the market for, say, cars, with luxury vehicles for a few and basically functional, affordable options for the masses. (No one wants to be the Crazy Eddie of Higher Ed: We’ve slashed tuition so much we must be insaaane! Nor do students or parents want Crazy Eddie, exactly. But no one wants to be crushed by debt either.)