Here is an answer provided by two economists. Consider two more factors. First, colleges do charge different people different prices. Here is some evidence from Yale. Suburban parents are subsidizing other students. Second, a fairly large share of university workers are unionized and are earning pretty good pay and benefits relative to market alternatives. Both of these examples highlight that our universities engage in redistribution and this contributes to the price tag. Are faculty and deans overpaid? “Yes” and “No”. There is a national competitive labor market here. There are many ambitious universities and thousands of academics competing for these jobs. And what about the tenured old guys? I do support mandatory retirement at age 65. I will retire from UCLA on February 16th 2031 (or earlier!).