<p>Isn’t it true that Athletic Directors at many schools make much more than the President or any other executive officer? Most of that is justified by the obscene amount of money made on the backs of unpaid college athletes who are used by the institution to bring in large sums of booster and television money. Who is to say that the Presidents, who run the show, shouldn’t be just as well compensated?</p>
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<p>I’ve always wondered how they got away with that. It would be illegal for instance, for a store owner to charge more for White patrons than Black, right? Or more for wealthy patrons than poor? I’m not sure. </p>
<p>Price discrimination isn’t categorical discrimination. Airlines and hotels do it all the time. </p>
<p>It’s not illegal for Jet Blue to charge me $1200 to fly from NY to LA tomorrow. I booked my ticket yesterday, am not staying over Saturday night, and wanted the flexibility to cancel if my meeting plans changed. The family behind me on the plane will have paid $350 for the same seat. They bought their tickets six months ago.</p>
<p>Price discrimination happens all the time. Why make this a racial thing? There is zero evidence that colleges use financial information in an illegal manner.</p>
<p>And I pay much less in auto insurance than my next door neighbor. His 22 year old son has fender benders all the time- they have a low deductible policy and are constantly claiming accidents. And I pay less for the identical home owners insurance policy too (the houses are essentially the same and we have the same agent).</p>
<p>Why is this suddenly problematic?</p>
<p>Back to the OP- vote with your feet if you don’t want to subsidize anything you don’t feel is worth it. But the relationship between presidential pay and tuition is tenuous at best…</p>
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<p>I don’t think it would be illegal to charge a wealthy patron more than a poor one. Certainly colleges do it all the time. I asked the question because OP seemed to have a problem with variable pricing in another post. Apparently, OP is only a capitalist when it benefits him.</p>
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<p>Would it be legal to charge a poor patron more than a wealthy one? </p>
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<p>This is not analogous, you and the family behind you are getting different services and facing different market conditions. </p>
<p>Hey, if that highly-paid college president is really successful in raising funds, some kids may pay less to go there because he may be able to get more donations to support financial aid.</p>
<p>The question is, I think, can these colleges get somebody just as good at the job for less money? Most of them probably can’t, although there are a few surprising outliers on the list where the compensation seems out of proportion to the size and status of the university. But it would be silly to avoid Harvard because the president gets paid a lot.</p>
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<p>Yes, it would be legal, and it happens all the time. Think merit scholarships that are awarded to children from wealthy families. These families may be paying less than those from modest incomes whose children were not awarded a merit scholarship and may not be getting much need-based aid, simply because the institution doesn’t give need based aid.</p>
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<p>I don’t think they’re getting different services (except that one is flying last minute), but I’d agree the comparison is not analogous because the airline is offering those tickets at that time to anyone willing to pay. Their tickets are essentially always up for the highest bid, and the highest bid will vary wildly over the period of time the seats on that flight are up for sale. That’s not the case with variable tuition pricing which is based on current income and sometimes assets.</p>
<p>Good point! I do think if the airlines or a car dealer or almost anyone else charged based on income it could be a problem. And, paying a premium for last minute purchase is not analogous at all to being charged what the government or an institution decides you should be able to afford. The only other service that works like this is now healthcare. So, maybe we think everyone is entitled to college and that’s where this is coming from. </p>
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<p>That’s the different service I’m talking about. But yes, you’ve pointed out another reason why it’s not analogous. </p>
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<p>I don’t know how they get away with that either. It’s anti-competitive. A form of exclusive dealing. The way hospitals do it seems like it is actually illegal, but I’m sure they employ people who know far more about the law than I do. </p>
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<p>How so? I don’t see the similarity. </p>
<p>@GMTplus7,</p>
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<p>Sorry,I don’t understand your comment. I was responding to this claim:</p>
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<p>College presidents are not analogous to school principals.</p>
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<p>Different insurances companies get charged different rates, insurance companies are practically always charged (meaning they pay less) than the hospital would charge an individual with no insurance, and hospitals will discriminate and try to gouge rich customers more than poor customers because they think they can extract more out of the rich. </p>
<p>Literally anti-competitive. </p>
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<p>Not exactly a fair comparison since the income of the awardees in each particular instance is irrelevant to the colleges (although I suspect the family income is quite important on a macro level). Colleges are not basing each award on family income but on student accomplishments. However, in practice, it is very possible that rich kids are in fact awarded more merit than poor kids. College is a financial decision for everyone and should be treated as such. Sure, there are some emotions, just like there are in any large purchase (home, car) but the anger and resentment when it comes to college costs in my view is very misplaced. They’re charging, people are paying. End of story.</p>
<p>I know we’re very fortunate to be able to afford decent educations (state schools, heavy merit at privates) for all four of our children without jeopardizing our retirements or stressing our lifestyle too much. Can we afford to pay full price at Harvard? No. But does H want my kids badly enough to give them a discount they see fit to give others? No. So we move on from the Ivy League and look at schools we can afford. I don’t really understand why people get so worked up about it. If most people treated college like the financial decision it is, I think we’d see cheaper AND more equitable pricing.</p>
<p>I think the US must be the only country that mean-tests the cost of higher education. Other countries offer their citizens higher education on the basis of academic merit.</p>
<p>Vladenschlutte, I suggest that you brush up on basic economics. There is nothing “anti-competitive” for a business to negotiate different prices with different customers. Indeed, negotiable pricing can make a market more competitive and, in some instances, is a hallmark of a competitive market. You are simply using the word “anti-competitive” incorrectly. </p>
<p>I’ll put on my socialist hat and say that the growing gap between the pay of the CEO and a janitor/secretary/cashier/etc. at every US company is problematic. If we’re going to complain about college presidents, we should complain equally about the money shoveled to the CEO of Walmart and McDonalds and other large corporations. </p>
<p>Do you think if the CEO of Ford was paid less the cost of a car would drop significantly?</p>
<p>Ah yes…negotiating price. Happens with cars and homes ALL the time.
But back to the thread topic. I don’t think these college presidents are overpaid.</p>
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<p>It is exclusive dealing, except instead of outright refusing to do business with some, they charge a higher price for them. Exact same concept. It is absolutely anti-competitive.</p>