Unfair Tuition
Hannah George
Economics
Mr. Reuter
6 October 2014
Unfair Tuition
The majority of us taking economics are seniors which means we have all already spent days or weeks filling out college applications, typing college essays, researching scholarships, and dreading the insanely high cost of college. No matter which college a student decides to attend, student loans and debt are a constant fear. The sticker price or initial price of college attendance has risen three times faster than the inflation rate of the American economy. Of course not everyone has to attend college, and thousands of high school students decide not to, because of the insanely high costs to attend college. But like all decisions there are externalities, both positive and negative, depending on whether a student decides to go to college or not.
Many, if not all, students applying for college will also apply to financial aid. Financial aid allows families and students to acquire money from the government to help cover the expensive costs of college tuition. When applying for financial aid, though, the government, or banks, take into account what the parents are making each year, how much the student is making, how much the family is paying for taxes and the other debts or expenditures the family is making. This creates price discrimination, since not every student will be able to afford to pay the same amount for college tuition as other students. Even with this price discrimination, college tuition is still impossibly high for many students, so a loan pool is created. The loan pool between banks and students has expanded to help students pay the higher prices of education but because students are able to borrow more money college’s increase the tuition sticker price because they are able to receive more money from students. As many adults like to brag to their college students that they were able to leave college with no debt from loans, they forget to take into consideration how hard it is to find good paying jobs in our current economy. 
The price discrimination of college prices means that people are willing to pay “much more for any good or service than other people are…” says Kenneth Gould in his explanation of high college tuition costs. He goes on to explain that when “producers,[or the colleges,] no longer need to complete, the prices always rise faster than they otherwise would.”
Over the course of the last thirty some years the sticker price on college tuition has risen roughly 7% while the overall economic inflation rate has only risen 3.2%, this basically means that the cost of college is rising faster than the overall inflation which clearly states that the cost of college has increased greatly.
David Feldman writes, “Most stories about the rising cost of education highlight seemingly wasteful practices at colleges and universities—the “dysfunction narrative.” Frequently cited practices include prestige competition among schools for students and faculty, the system of faculty tenure, gold-plating the college experience with fancy amenities, and administrative bloat.” Feldman is describing that colleges are basically overcharging it’s students in order to label itself as a prestigious school, one that has all of the newest technology, workout complexes, classrooms, dorms, buildings, etc, etc. The reason that students are overpaying for a college education is not for the education itself but for the prestigious environment of the school.
Works Cited
"AMERICAN.COM." The High Cost of College: An Economic Explanation — The American Magazine. N.p., n.d. Web. 7 Oct. 2014. <http://www.american.com/archive/2012/august/the-high-cost-of-college-an-economic-explanation>.
"Nope, just debt." The Economist. The Economist Newspaper, 29 Oct. 2011. Web. 7 Oct. 2014. <http://www.economist.com/node/21534792?zid=316&ah=2f6fb672faf113fdd3b11cd1b1
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