Because goods and services cost what people are willing to pay, not what they cost to produce.  The value of your college degree is based on the institution&#x27;s accept&#x2F;reject ratio, not on the quality of instruction (which is nearly impossible to quantify).<p>It means starting a new prestigious college is nearly impossible.  Without excess applicants to reject, a new college doesn&#x27;t rank well, which in turn means less interest by students and parents.  The upper tier colleges can charge pretty much whatever they want without fear of competition.<p>That also means colleges put a lot more effort into attracting students than actually educating them.  As long as there is an excess of people wanting adjunct positions, institutions can get away with a high-low strategey - a handful of well known full professors and an army of starving adjuncts.