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<p>On the other hand, it is not out of the realm of imagination for a super-selective school to raise its list price, but increase financial aid in a way that families that would get financial aid now pay the same, but those who would pay today’s list price now pay the same or more, even if some of them would get some financial aid against the higher list price.</p>
<p>For example, suppose the current list price is $60,000 per year.</p>
<p>Family 1 is poor and pays $5,000 per year after financial aid.
Family 2 is moderately wealthy and pays $20,000 per year after financial aid.
Families 3 through 5 are pay list price of $60,000 per year with no financial aid.</p>
<p>Suppose the school raises its list price to $100,000 per year and adjusts financial aid accordingly.</p>
<p>Family 1 still pays $5,000 per year after financial aid.
Family 2 still pays $20,000 per year after financial aid.
Family 3 pays $60,000 per year after financial aid.
Family 4 pays $80,000 per year after financial aid.
Family 5 pays list price of $100,000 per year with no financial aid.</p>
<p>In this case, the school gains an extra $60,000 per year from families 4 and 5, but families 1, 2, and 3 do not pay more because the school does not think that they are able or willing to pay any more than they currently do.</p>
<p>Indeed, an analogous type of thing is going on already. The University of California is rapidly raising in-state fees in response to budget cuts, but its financial aid policies mean that students from the bottom 70% of household income families are not affected. Clearly, the strategy is to get more revenue from the wealthy families who are able and willing to pay (and many grumble but are willing to pay since those who pay list price will still find UC less expensive than many other schools, although a few who get into the super-selective super-generous-financial-aid schools will likely find those schools cheaper).</p>