The outrageous price of a U.S. degree is unique in the world.
“I used to joke that I could just take all my papers and statistical programs and globally replace hospitals with schools, doctors with teachers and patients with students,” says Dartmouth College’s Douglas Staiger, one of the few U.S. economists who studies both education and health care.
Both systems are more market driven than in just about any other country, which makes them more innovative—but also less coherent and more exploitive. Hospitals and colleges charge different prices to different people, rendering both systems bewilderingly complex, Staiger notes. It is very hard for regular people to make informed decisions about either, and yet few decisions could be more important.
In both cases, the most vulnerable people tend to make less-than-ideal decisions. For example, among high-achieving, low-income students (who have grades and test scores that put them in the top 4 percent of U.S. students and would be eligible for generous financial aid at elite colleges), the vast majority apply to no selective colleges at all, according to research by Caroline Hoxby and Christopher Avery. “Ironically, these students are often paying more to go to a nonselective four-year college or even a community college than they would pay to go to the most selective, most resource-rich institutions in the United States,” as Hoxby told NPR.
