The Princeton Review reports that sixteen schools now charge more than $100,000 per year. The sticker price hit six figures. Students are not actually paying this amount. The schools know students are not paying this amount. The schools published the number anyway.
This is called anchoring. You see a $100,000 price tag. Then they offer you a $60,000 "scholarship." You feel grateful. You just agreed to pay $60,000 for a sociology degree that prepares you to manage a Panera Bread. The Panera job pays $38,000. You will never do math again.
The article says many students pay significantly less. Significantly less than $100,000 still means your parents are refinancing the house so you can spend four years drinking Natty Light and pretending to read Foucault. But the number looked big on the website. That means the education must be premium. Like how a $12 cocktail tastes better than a $4 cocktail even though they both have the same well vodka that costs $0.43 per serving.
Colleges raised prices during a period when they also eliminated required courses, added mental health days for midterms, and replaced professors with adjuncts who earn less than your Uber driver. The value proposition improved in the same way that shrinkflation improves potato chips. Smaller bag. Higher price. Same emotional emptiness when you reach the bottom.
Retail traders will see this headline and think it is bullish for student loan servicers. They will buy $NAVI calls. The calls will expire worthless. The students will graduate with debt they cannot discharge in bankruptcy. The colleges will use the tuition money to build a new lazy river for the wellness center.
Sixteen schools joined the club. The other schools saw the headline and immediately scheduled board meetings to discuss pricing strategy for next year.
Photo by on Unsplash
Leave a Comment