Hi! Please help me. I need your opinion about this case. What problems could you see arising from a university that adopted such a pricing scheme?

In the face of stable (or declining) enrollments and increasing costs, many colleges and universities, both public and private, find themselves in progressively tighter financial dilemmas that require basic reexamination of the pricing schemes used by institutions of higher learning. One proposal advocated by the Committee for Economic Development (CED) and others has been the use of more nearly full-cost pricing of higher education, combined with the government provision of sufficient loan funds to students who would not otherwise have access to reasonable loan terms in private markets. Advocates of such proposals argue that the private rate of return to student investors is sufficiently high to stimulate socially optimal levels of demand for education, even with the higher tuition rates. Others argue against the existence of significant external benefits to undergraduate education to warrant the current high levels of public support.

As with current university pricing schemes, proponents of full-cost pricing generally argue for a standard fee (albeit higher than at present) for all students. Standard-fee proposals ignore relative cost and demand differences among activities in the university.