Why College is Being Treated Like a Luxury Good

And Why Pretending Otherwise is Costing the Sector Trust

In this three-part series, I wanted to understand what actually changed in higher education, and why trust declined as a result. Part 1 looked at how higher education lost the benefit of the doubt, and why families now approach college with a more evaluative, consumer mindset. Part 2 explored how the system grew, and how that growth shifted both cost and complexity onto students and families.

This final piece focuses on the result of those shifts: a higher education experience that increasingly looks and feels like a luxury purchase, whether institutions intend it to or not. 

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College did not suddenly become expensive. It did not suddenly become exclusive. And it did not suddenly lose its public mission. But the way higher education prices itself, markets itself, and competes has changed how families experience it. And that experience now drives behavior more than any institutional argument about value.

The economics of luxury goods are built on signaling that brand matters, scarcity matters, and price ultimately communicates value.

Viewed from that perspective, much of how college functions align uncomfortably well. Selectivity is celebrated as proof of quality, rankings shape demand, experience is marketed alongside outcomes, and scarcity is carefully managed.

At the same time, higher ed resists being evaluated as a luxury purchase. When families question cost or outcomes, institutions often pivot to moral or civic language. Sure, it’s expensive (or simply more than you want to pay), but look at all the good it does for society and communities. Education is different and reducing it to solely ROI misses the point. While those arguments may contain the truth, they do not align with the actual experience of college.

Three Identities, One Trust Problem

Higher education today holds three identities at once, and the tension between them is what families feel: it positions itself as a luxury good, delivers unevenly like a service, and defends itself as a public good.

Other sectors can draw clearer lines:

Luxury goods rely on desire and exclusivity. 
Professional services get judged on reliability and outcomes. 
Public goods are funded collectively and defended politically (Public funding, whether direct state or federal support or governmental income-based financial aid, has been volatile. The sector is clearly a political target.)

None of them ask consumers to hold contradictory logics in mind while making a high-stakes financial decision.

Higher education blends all of these, expresses dismay when families respond with skepticism, and blames marketing for the gap.

The Harder Bar

What erodes trust fastest is not market reality. It’s insisting that market reality does not apply. 

Families understand what college costs. What they want is a clear answer to what they are actually paying for, who benefits, and whether the institution can answer those questions the same way regardless of who is asking.

Leaders who can answer those questions consistently give marketing something real to work with. The job shifts from defending an institution’s identity to helping families understand where they fit within it, with clarity about what students are paying for, what society benefits from, and where the tradeoffs lie. 

Institutions that make comparisons explicit, name trade-offs directly, and align brand signals with price reality will earn the trust that aspirational messaging has failed to earn. 

That is not a lower bar. It is a harder one. And it is the only one that matters now.

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The harder bar requires more than a brand refresh or a better campaign. It requires enrollment, brand, and advancement working as a single system toward the same growth agenda. 

That is exactly what our Growth Ambitions webinar is built around. If you are a CMO carrying a complex growth mandate, the data from this year’s Higher Ed CMO Study shows what separates institutions gaining ground from those losing it. Register today and bring the questions your current framework has yet to answer.