ESSAY : Setting Tuition & Financial Aid

Setting Tuition & Financial Aid

Tertiary education confers status to the possessor. There exists a perception that a prestigious college is synonymous to an expensive college. Consequently, attending a conspicuously expensive college signals attainment of a social status. Given this perception by the public, college education could be described as a Veblen service whose demand increases with an increase in price (Lassila, 2011). As a result, the demand curve for colleges slope upwards. Such services are exceptions to the law of demand.

With competition for employment opportunities looming all over, education acts as a differentiator amongst the candidates. Cheap education is regarded as inferior with most people preferring to enroll in expensive colleges as they are perceived to offer quality education.

Given the exception to the law of demand and the fact that quantity demanded increases with an increase in price, an increase in the price of education would result in an increase in the number of students enrolled in the college (Hemelt & Marcotte, 2016). Based on this analysis, Susan Hansen should implement the decision to increase the school fees of liberal arts college to $25,000 from $15,0000 and expect a rise in the number of students seeking enrollment in the college. This would also act to resolve the current financial constraints in the institution. In order for the new price system to work effectively and produce the desired effects, the college should improve on the quality of education and skills offered to its students. Additionally, the college should invest in facilities and resources that…