(Part I here)

Not everything I described yesterday applies universally – obviously. Elite universities tend to play a different game (since they don't need to do anything to get boatloads of applicants) and some public schools are seriously constrained by decisions made in state capitals. But bear in mind that the vast majority of the 6000-plus degree-granting higher education institutions in this country are hurting or starting to hurt for enrollment. For every Stanford that kinda just does whatever the hell it wants there are ten New England or Midwestern private schools scrambling to make their enrollment target.

To summarize Part I:

1. For ethical and economic reasons, higher ed is going all-out to recruit 1st Gen and non-traditional students
2. Those applicants are the least likely to understand that the full stated tuition price is not what he/she is likely to pay
3. 1st Gen students opt out of applying for places they think they can't afford, lacking the insider understanding that, as a heavily targeted and recruited population, he or she is likely to get substantial discounts
4. The cycle of failing to bring in 1st Gen and underrepresented students continues

The question we closed with is: If few students are paying "full freight" at a lot of universities, why is the stated tuition price always so high? What's the point of saying your tuition is x when the average student is paying (x/2)?

There are three answers of varying complexity.

One is a feedback loop in which expectations of discounts (from students with college-educated, hyper-well-researching parents who are likely well-off and successful) pushes tuition higher. If you know everyone is expecting to be able to tell their friends "Junior got a 50% scholarship" but you still need to make some money, pushing the base price as high as possible makes sense. This is simple enough.

Two, universities hurting for enrollment can cultivate what a colleague (not at my current or previous universities) euphemistically calls "no discount students" by targeting marginal or underwhelming students with rich parents. Mom and Dad have money and want Junior to go to a good school. Junior's grades and test scores are pretty bad. Good School says, look, your kid is under the admissions bar here and *ordinarily* we would have to reject this application, but…well, maybe we can make an exception. Think about the incentives here. Mom and Dad are less concerned about money than about Junior's future. Junior would like to go somewhere Good. The university can easily justify sliding a few below-average applicants in under the bar (and when such students end up succeeding, everyone can feel good about that). It's an all-around win, excepting of course for the faculty who have to teach incoming freshmen who may lack the ability to do work at a college level. But no university administrator has ever cared about that, so.

Finally, there is the elephant in the room: non-US students. High base tuition rates are primarily intended to soak international applicants. They never get discounts. In fact, some places create a separate, even higher price point for them. And while domestic applicants are sensitive to tuition rates – push it too high and they simply go elsewhere – internationals tend not to be for a couple of reasons. One, the students (particularly from Asia) whose parents are sending them to the US for college tend to be among the very wealthiest. You are *not* getting a cross-section of India's population when you look at students from India coming to US universities. Second, in many cases (China, the Middle East, etc.) neither the student nor their family is writing the checks. When the state is footing the bill, the students could care less. I'd be shocked if some of them even know what the tuition rate is.

Schools of every type are working double-time to bulk up on international students now, creating new programs to appeal to the needs and wants of foreign governments that are, in effect, wealthy patrons. Oh, China wants a million electrical engineers? Well heck, we can expand that program easily. The percentage of foreign students on US campuses – many of which are very poorly prepared to integrate and accommodate the needs of anything other than American white kids – is rising not out of some soft-headed liberal desire for multiculturalism. It is strictly a matter of economics. Every US applicant who comes to campus at a discount has an international student counterpart who is getting reamed on tuition – and probably couldn't care less. Everybody wins!

Of course, everybody doesn't win. But that's a story for another day.

That day will be tomorrow.