University of California Moving Toward Increased Price-Gouging of Students

Information technology has drastically increased productivity in most industries dedicated to the assembling, packaging, and transmission of information. But the field of higher education appears superficially resistant to the trend — tuition keeps skyrocketing. And Kevin Carey observes a nice case study in the dynamics as the University of California launches a new online degree-granting program:

Long term, the idea is to expand access to the university while saving money. Tuition for online and traditional courses would be the same. But with students able to take courses in their living rooms, the university envisions spending less on their education while increasing the number of tuition-paying students — helpful as state financial support drops.

Normally the idea is that if you invent a cheaper way of producing something, you take advantage of that to reduce prices and increase sales volumes. That’s more profit for you, but also more surplus for consumers. But here the school is planning to just increase margin. It’s bad for students, but also the sign of a dysfunctional marketplace. At any rate, Carey seems too bashful to point it out, but he published an excellent Washington Monthly article about a year and a half ago that lays out these dynamics very well.



CORRECTION: The post in question was actually written by Chad Aldeman. Apologies for the error.