How is College Education Like Health Care?
This is Brad Plumer, posting at the Ezra Klein blog:
We’ve pointed out before that, since 1978, the cost of a four-year education from a public university has been rising much, much faster than even health care costs. That’s a staggeringly steep rise.
But over at NPR’s Planet Money, Jacob Goldstein notes that these tuition figures can be a tad misleading. The “sticker price” of college has been rising at a frantic rate, true. But we should also consider the “net price” which is what students actually pay after factoring in grants and scholarships…many schools are now posting high sticker prices and then giving scholarships to just about everyone, according to US News. Essentially, these schools are like car dealerships — nobody actually pays the posted price.
It’s bad news for competition when an industry increasingly relies on high (unrealistic) sticker prices, and give most customers a discount. This can only occur under a system with widespread use of third-party payment.
The similarity: neither market is a real market.
Two con games that share many traits.
This is so true. At some point, we might see a collapse in college tuition.