


Among the many undesirable aspects of American higher education is the deceptiveness of its pricing. Unlike most goods and services, where there is a clear price that’s the same for everyone, colleges figured out decades ago that they could rake in more money with an opaque pricing scheme where some students pay much more than others.
Prompted by a recent essay on this by Dan Currell, in today’s Martin Center article, I argue in favor of open, non-discriminatory pricing by colleges and universities.
The problem began, Currell notes, when college officials realized that they could benefit from the “Chivas Regal Effect,” namely, getting families to think their schools must be very good because they charge almost as much as Harvard. There weren’t enough families with enough money to pay the full list price, so schools started to offer discounts that were euphemistically called “institutional aid” or “scholarships.” That helped fill up seats that would have otherwise gone empty while simultaneously making it seem like the school was very impressed with the kid’s academic prowess.
Curell believes that the deception creates the impression that college costs a lot more than it actually does, and this works to the detriment of poorer families. How true that might be I’m not certain, but in any case, I think that colleges ought to adopt a policy of having published rates for tuition and fees, and not deviating from it.