I'm surprised that Mr. Drum is so economically ... unsophisticated. And the quotation he opens with is downright stupid; no conspiracy or nefarious intent is ne

I'm surprised that Mr. Drum is so economically ... unsophisticated. And the quotation he opens with is downright stupid; no conspiracy or nefarious intent is needed to explain the phenomenon. As you say, it boils down to those basics. One would expect that as prices rise, fewer people would attend college. However, as Americans wail that college costs are too high, the government attempts to "help" by subsidizing the costs through various means. But given the number of applicants, colleges still need to limit enrollment to their actual capacity, and the way to keep some people out is by raising prices, allowing those at the lower margin (in terms of their desire to attend) to drop out of the running. But I think that the accounting for the benefits (and opportunity costs) of attending college is way more complex than just looking at differences in income. There is also a person's feeling of personal accomplishment or growth; the student's (or their parents) status; signalling of group membership; and so on. And it seems that a college education is a product whose elasticity is very low. As a society, we've come to view it as such a significant marker for job ability and for social status that we've grown increasing convinced that it's a necessity, and thus colleges must raise prices even faster to keep the enrolled population (i.e., quantity demanded) manageable.