Here’s an interesting tidbit: A bachelor’s degree from a public university costs 40 percent more in the US than in Canada, but American financial aid policies mean that poor US students wind up paying a lower net tuition than their counterparts north of the border. Christopher Flavelle wonders why, given that fact, low-income Canadians are still more likely to attend college than low-income Americans are:
[Economist Lance] Lochner offered a few possible explanations. One is price transparency: The gap between the sticker price and what you’ll actually pay to attend most US. colleges is enormous and hard to quantify, and that may be more of a disincentive to low-income families than to those for whom money is less of a concern. A more troubling explanation, and one that’s far harder to fix, is that people are less likely to come into contact with those from other income groups in the US.
“In the US, people are much more segregated in where they live,” Lochner said. “It could be, because of that, you have more segregation of knowledge.” In Canada, by contrast, “you’re more likely to go to a school where everybody hears about” the advantages of going to college, and where somebody can help you figure out what steps to take to get there. If that’s true, it means that income inequality hasn’t just increased the economic value of going to college, by increasing the earnings premium associated with a degree. It has also made going to college harder, by reducing the odds that young people from poor families will be told that a college degree is something they can attain, or should even try to attempt.
David Leonhardt emphasizes how Americans generally pay less than the sticker price for their degrees: