Somehow doctors and colleges have maneuvered themselves into a position where they act like greedy companies but have a reputation for working for the greater good and should be trusted more than regular companies . Also people still believe that non profits are dogooders which is completely untrue in the case of schools and medical facilities.

This is what I don't get about "financial aid". The "elite schools" name an outrageous figure, charge the rich kids, give money to the poor ones, and ignore the middle class. This is probably intentional: they want either students whose daddies will donate or students who look good on press releases about "diversity". Now that the feds have nationalized student loans, colleges can continue these stupid policies knowing that the bottomless credit card of the American taxpayer has their back. Federal student loans don't consider a student's major, either; there's no way a "xyz studies" or poetry major should get the same loan at the same rate of a stem kid, even if that student has the same financial situation. From an actuarial perspective, it's nuts: one is going to end up a starving artist and the other has a promising career.

Oh, and my two cents: if you want to end up with larger numbers of under-represented groups in higher-paying fields, maybe making the long-term outcomes clear at that stage would help. Saying, "follow your dreams!" is very, very stupid advice to an eighteen-year-old.

That's not 100% accurate (the middle class is NOT ignored at the elite privates). For example, Stanford meets 100% of the tuition for students with family income <=$150k.[1] And the assistance doesn't evaporate completely at $151k. For families with incomes <$65k, tuition and expenses are covered. Most of the Ivies are similar.

The problem is really at elite publics, which don't have the massive endowments, so cannot subsidize middle class students.

We're at a point where it can be LESS expensive for many middle class students to attend Harvard than UMich or UVA.

1 - https://financialaid.stanford.edu/undergrad/how/parent.html

Colleges and doctors are both decommoditized and competed over by those seeking "quality" and the minimal end up comparatively shunned if at all aware or having an alternative. High stakes breed those sorts of markets - it is no accident that doctors and lawyers are synonymous with highly paid non-management roles.

They are also seevices which means there is no preserved buffering possible. You can't just have a factory of doctors fill a warehouse with 40 hours of medical care each every week. Given the opportunity cost trying to "squeeze in" what they can in a discard free knapsack problem sort of way makes sense given the incentives even if the outcome isn't ideal or fair.

>tuition cost = how much you can borrow + how much you can pay

I need this flushed out a little bit more. I have worked in higher ed for decades, and have never encountered a college that charges in that manner. They have a flat tuition, and the student fills that payment however they are able. But it's not like it changes based on how much capital they have access to.

Can you please explain that statement?

It sounds to me like your parent is describing financial aid at high end colleges. The college has a sticker price, say $50k/y, and for people that can't afford it they have need-based financial aid. They ask you lots of details about your family's income and assets, and come up with a number that they think is the most you can pay.

It's price discrimination, in that it's charging people in proportion to what they can pay.

Are you referring to the loan-based "financial aid"? This is one of the most hypocritical terms I came across. It's a loan, not an aid. An aid would directly reduce the amount of money you have to pay (discounts, scholarships, grants, etc.). A loan is not an "aid".

I'm primarily talking about grants, not loans, since that's where the price discrimination is clearest. They're effectively setting the price at exactly what they calculate you can pay.

No, the generous "financial aid" policies of many universities amount to perfect price discrimination. They meet "one hundred percent of demonstrated need"; their phrase, not mine. This means they calculate how much you can afford to pay and charge you that much. That' is every monopolist's/oligopolist's dream. Oh, and they don't show how they calculate that "demonstrated need". I got prices much higher than what I could afford.

Just wait until Uncle Sam foots the bill directly.

He has quite the "ability to pay".

Right, but he also then has a lot more incentive to keep costs down and the power to enforce some requirements and controls to keep costs down.

Seems to work OK in every other civilized country on Earth.