<p>I believe the baseline price for nearly any school is what the student can borrow from sub and unsub stafford loans plus the value of the pell grant ($5500). The assumption is that either parents make enough income to cover the value of the pell grant or they have enough need to receive some portion or all of the pell grant. Based on that the least expensive school for anyone should be around $12k/year (in my estimation that would include tuition, fees and books). Those who make more money would have the opportunity to pay for room and board, and other expenses that go along with sending your child to a university you cannot commute to. </p>
<p>In this scenario those universities which charge more would need to offer some perceived value which buyers would be willing to pay extra for. Obviously the elite universities have that status to offer as value. LACs are suffering because of a loss of real income over the last decade and a loss of perceived value of a liberal arts degree. Those with low perceived value may be stuck in the situation that buyers will not even be willing to pay the minimum cost expected to attend a four year university. The current discounting (scholarships/institutional aid) is the schools way of finding a price point that buyers will be willing to pay without actually lowering tuition. If the current trend of lower real incomes and lower perceived value continues, in my opinion many won’t survive into the next decade.</p>