In this morning’s New York Times, William M. Chace, a former president of Emory and Wesleyan Universities, offered the welcoming speech he always wanted to give to incoming students, but could never deliver as a college president. Just a bit of his speech explains what should be obvious about skyrocketing college costs, but is constantly denied by “experts” in higher education policy: As more and more money goes into the ivory tower, students demand ever‐​grander amenities, and tuition prices are driven higher and higher.

Laudable [a fictitious university] could be cheaper, but you wouldn’t like it. You and your parents have made it clear that you want the best. That means more spacious and comfortable student residences (“dormitories,” we used to call them), gyms with professional exercise equipment, better food of all kinds, more counselors to attend to your growing emotional needs, more high‐​tech classrooms and campuses that are spectacularly handsome.
Our competitors provide such things, so we do too. We compete for everything: faculty, students, research dollars and prestige. The more you want us to give to you, the more we will be asking you to give to us. We aim to please, and that will cost you. It’s been a long time since scholarship and teaching were carried on in monastic surroundings.

For state and federal policymakers, the implications of the basic economic reality Chace describes should be pretty clear. All the aid that they give to students using taxpayer dollars–more than $96 billion in the 2004-05 academic year alone (which is more than twice the inflation‐​adjusted total of just 10 years prior)–allows students to demand more and more grandiose stuff, and in so doing drive college costs to ever‐​dizzier heights.