Economics 101 taught us that the free market will dictate the price of colleges. So given so much negative press towards higher education, why is the demand for colleges still so high if the cost is on an exponentiation growth.
Well from our readings, we learn that the free market did dictate the price of colleges, but not directly linked to an increase in demand. At least that is what the author tried to argue in the book “Why Does college cost so much” by David Henry Feldman. The reason why college costs so much, he argues, are due to “economic growth itself is the driving engine of cost in the still artisan-like higher education industry”. This means that rather than the high demand, the cost is actually driven by the market forces such as the recession or the economic booms. Triple this with the decrease in subsidies as a percentage of cost provided by state governments to their state supported colleges and universities, we learn that the cost of the colleges have risen to catch up with the economy.
This means that colleges and universities can no longer accept a large amount of students and have to limit the students they admit. So does this mean that the number of students admitted have to be limited to give way to ensure the quality of the colleges? I find this very interesting especially given how the world now demands a degree of some sorts for the most basic jobs. With such strong social norms of going the college, society are basically creating a society that will owe large debts. An unhealthy culture perhaps.