It's funny how the price vs. demand curve is often inverted in the education marketplace. Charging higher prices signals customers to think that the education must really be better, and so more students try to get in even when the actual quality of education is no better than at cheaper schools.

Having more data available about the value added by each school would certainly help eliminate this market inefficiency. But if that value add were to be calculated using a standardized test taken by all entering freshmen and graduating seniors that could lead to unintended consequences, such as teaching to the exam rather than providing a liberal education.

I don't think price makes people think it's a better education; I think it's US News rankings and popular hearsay put out by books and movies. I bet that everyone who shops diligently for these things believes that the Cooper Union is great, but that expensive non-famous liberal arts colleges are not.

With no intention to disagree with what you're saying, I want to bring up the point that "colleges are businesses" doesn't apply nearly as much as, well, "businesses are businesses". It's an approximate model at best.

The poster child for this is the idea of "academic" work as being less valuable (in dollars, anyway) than work done in a business environment. It's more than just cultural — colleges don't suffer under market stress in quite the same way. Part of that effect is an appreciable tuition, walled garden style.

So then you have to question what an academic "floating" environment can provide. If half the reason you're there is because you're already motivated to succeed without being there, what do you gain? Does Ivy League provide that in greater amounts? How much do connections and environment really matter?

I feel like that might be the stronger question that'll lead to informative answers.

I like where you are going with this. First, my friend and I were discussing this post earlier and he did as well, bring up that the idea that colleges are worth much more than just their functions as businesses. Granted they DO function as businesses, but as you bring up, they are unique in that they invest in cultural and societal advancement and inquiry, things that are quite intangible. So in a sense yes we do have to think about them in a unique light. Secondly, as a person that willingly choose not to go to college (I would have just graduated) I can tell you from experience that it is indeed not so much what you learn in college that is important, but it is the connections and influence if you will, that you get for being affiliated with a "recognized" entity. Truth be told, I have submitted a proposal to ycombinator and as an aspiring web developer IT IS PAINFULLY hard to attract and team up with like-minded individuals. So yes, you heard that right, I did not say it is hard to learn how to program, how to run a business (i currently do), hard to pay your bills, hard to grow up and mature, no no I said its hard simply to find people. So in that respect, I think that is colleges greatest reward. And don't get me wrong, civilization was built with TEAMS, so its a good reward.

You can see then how it all neatly comes to fit. The environment you are placed in contains a certain type of people. Colleges help you connect with these people in this environment. It's just so "structured" that way. You become connected with mentors (your professors and alumni) and you connect with peers, and you connect with protegees. It's the whole neat, clean package.

No it is not impossible to meet and connect with people and build something great (as many have done) but college just streamlines the process.

You don't pay to go to college to learn. Just as you pointed out the self-motivated will ALWAYS find a way to learn. And to add to that, think about just how much abstract and intangible things that are SO IMPORTANT to a good life that you can't learn in college, you can't learn anywhere. You have to learn them through your own conscious efforts toward self-improvement.

I'm sure that there are some colleges where other factors have greater influence on the behavior of the college. But for the vast majority, all that I've seen, the schools are operated exactly as you say.

The other factors are just a marketing trick. You know higher quality is a niche on its own --- and you have to seemingly ignore sales and concentrate on high ideals alone, to generate good sales in this niche. At least that's what works for industries other than education.

I think colleges should constantly measure the % their students who have become entrepreneurs in their life.