When some students asked Andrew Alper, chair of the University’s Board of Trustees, about the rising tuition at University of Chicago, the Maroon reported that “Alper explained rising tuition using the economic principles of supply and demand; the demand for a U of C education is high…so the University can increase tuition prices.”
That’s exactly the response Milton Friedman would have given: Charge what the market will bear. On the other hand, the demands for Harvard and Princeton educations are probably not so much lower than those for the U of C, and yet the cost for many attending those and several other institutions is nearly zero. For some years now a number of well-endowed universities, led by Harvard and Princeton, have moved away from loans to grants.
If the U of C offers an education for $200K, and comparable institutions offer an education for a whole lot less, we don’t need Professor Friedman’s economics acumen to know where the market will go.
Teacher at the Lab Schools