“There is a larger issue. College costs so much because people are paying for unstated social goals. Each college and university is a collection of many different activities, some of which pay for others. Research libraries and philosophy departments can’t possibly make money; they require subsidies from business schools and biomedical-research labs, but that drives tuition higher than it would be if universities dropped their money-losing functions. More broadly, the United States created the world’s first mass system of higher education. Hundreds, not dozens, of colleges aspire to be research universities—because there lies status, prestige, and intellectual excitement—and so they have faculty members with low teaching loads. That costs money. The system is built to take in just about all high-school graduates, and that costs money, too.

Where higher education is actually underpriced is in the top-tier schools. That may sound offensive, but price is determined by what people are willing to pay, and the top twenty-five or so schools in the country could charge even more than they do. The number of applications to those schools continues to grow faster than their cost. (Ivy League colleges will charge about sixty thousand dollars next year.) That’s because the perceived value of their degrees continues to rise. Now that we know that either Obama or Romney will be President next year, we also know that, from 1989 through at least 2017, every President of the United States will have had a degree from either Harvard or Yale or, in the case of George W. Bush, both. That could be a three-decade accident, or it may be a sign of something lasting—the educational version of the inequality surge, elevating “one per cent” institutions far above the rest.”

—Nicholas Lemann, The New Yorker, “How Valuable is a College Degree?”