Why Colleges Are Expensive
1. Such schools practice extensive price discrimination, I think more than in the past, so tuition substantially overstates the real cost. Judging by some figures I got at one school, the average student receives scholarship support equal to about a quarter of tuition.
2. The quality of what students get, and thus the cost of providing it, has gone up.
I should add that I have no idea whether the quality of the education has gone up--knowing that would require some reasonable measure of what students know coming in and what they know going out. But the environment in which they are educated is more luxurious, and more costly, than it was. A few examples:
All of the schools, so far as I could tell, provide the equivalent of free taxi service in and near campus, usually from the security department, to any student who calls in and says that he is worried about his safety--and in some cases to any student for any reason. Details vary, and in one case the service was provided by the town rather than the college.
The food service ranges from better than I remember to luxurious.
At one college, practically every floor has not only a resident assistant (student) but a "Wellness advisor" (also student--these are jobs with which students help pay tuition). The same college had both an "Office of the Consultant for Sexual Misconduct Services" and a "Gender and Sexuality Center," in different buildings.
At one college, when I asked about help for students finding summer jobs in their field, I was told that students could volunteer as unpaid interns--and receive a stipend from the college.
The college athletic facilities were more like a high end athletic club/fitness center than what I remember--and I went to Harvard, the richest school in the country then and now.
Expenditure on services arguably related to education has increased too. There are writing centers, where students doing papers can go to get help from (paid) upper classmen. There is the equivalent for math. Class sizes are very small. How much good this does in terms of outcomes I don't know. But I expect it makes the learning experience pleasanter.
To be fair, all of these were high end schools--six top liberal arts colleges, one top university (not all visited on this trip).
The general impression was of a gold plated education--cost no object. It isn't surprising that it's expensive.