<p>Yabutmommm…your kid’s experience just confirms my theory about the way merit aid works! Thanks for the data. Seriously considering writing an economics paper on the merit aid strategy of elite art schools. I can already see the optimization problem – the goal is to maximize tuiton --but the school can’t just charge an infinite amount of money because if a school charges more/provides less aid than competition the yield goes down and, then, so does your tuition revenue. So, yield (students enrolling who are accepted) is inversely related to tuition, but prestige is weakly, but positively related to tuition which is also positively correlated with yield so you get contradictory forces. Then, of course, as MICA and RISD have shown in past years they feel it is worthwhile to offer seriously big merit aid to “ringers”-- presidential scholars in the arts, gold portfolio winners, national merit scholars, etc so important to make big offers to a few students with boastful stats/awards. So, it is worthwhile to offer substantial aid to a few of these ringers because that increases prestige…which increases desirability of future students willing to pay big $$ to attend said prestigious schools. If all the schools acted independently (did not collude) you should get healthy competition–average students will get aid/tuition combinations that are similar accross the institutions. Real ringers should be able to show competing offers and try to get schools to bid up the merit and financial aid offers. If, however, the schools collude and “agree” not to offer (for example) more than 10% merit aid to regular student, 25% merit aid to the good student and no more than 50% for the ringers, the art schools will be better off as a whole but the students are at a very big disadvantage because they can’t negotiate past a certain point. I am not saying that the top art schools do collude, but the fact is is that they are a very small group of institutions that offer a very similar product which presents the advantage of acting as a cartel (restrict spaces in art school and collude on price)…a bit like OPEC. This will maximize tuition for all the institutions instead of competing and lowering the tuition revenue for all. </p>
<p>There are other suppliers of art education–state art schools, second-tier art schools–but they don’t really affect the pricing decisions of the prestigious 6-8 schools. Any more anecdotal evidence will be much appreciated!</p>