How Colleges Are Just Like Hospitals
A h
igher education riddle: When can a college slash tuition by almost half, without losing revenues? Answer: When nobody much pays full tuition anyway.
When Converse College, a tiny women’s college here, announced that it was “resetting” next year’s tuition at $16,500, down 43 percent from the current year’s published price of $29,000, the talk was about affordability, transparency and a better deal for struggling families.
But of Converse’s 700 undergraduates, only a small number — in the single digits, its president said, paid the full sticker price in recent years. Almost everyone received a tuition discount from the college, along with, in many cases, financial aid from the state and federal governments. (NYT)
But you won’t hear any of the usual suspects in health policy complaining about the universities that pay their salaries.
“For decades, most private college pricing has reflected the Chivas Regal effect — the notion that whether in a Scotch or a school, a higher price indicates higher quality.”
Definitely true in health care as well. I am unsure of the validity behind the thought, though.
Probably true generally, but definitely not always.
It really depends on your personal definition of quality. Some people get utility from “conspicuous consumption” regardless of an objective quality. For them, higher price may translate to higher quality.
I often wonder where all that tuition money goes. Is it due to excess administration? Tenured professors?
Into the pockets of the administration
There are definitely a lot of similarities between higher education and health care.
Yeah, they’re out to take our money
Well you can bet that the hospital where you get your knee replacement is not paying those outrageous pricest you get charged for your joint device or the tylenol they’re givning you for pain.
“But you won’t hear any of the usual suspects in health policy complaining about the universities that pay their salaries.”
It would be unwise to bite the hand that feeds you.
The key is choice. With the free online education we may see a legitimate challenge to the education-industrial complex.
If only. I have a feeling that the government will fight against disbanding the monopoly.