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Differential Pricing in Higher Education

The New York Times of March 30 reported that a California junior college planned to set two levels of tuition for some of its classes.  Many colleges set differential tuition based on in-state residence, level of class, or type of course.  But this plan would have explicitly set tuition differentially in order to fund additional offerings that would not otherwise be provided.  Essentially, the college was trying to move up the supply curve of courses, recognizing that demand far exceeds supply at the current (very low) tuition level.  The plan generated an outcry among people bothered by the pricing of education and was “indefinitely postpone[d].” But higher education requires resources; and if taxpayers refuse to pay taxes but insist on services, this seems like a perfectly reasonable way of meeting demand.  I expect that, as in so many areas, California will once again lead the nation, this time into an expansion of additional differential pricing of course offerings in higher education.