From the Atlantic:
The way Trachtenberg saw it, selling George Washington over the other schools was like selling one brand of vodka over another. Vodka, he points out, is a colorless, odorless liquid that varies little by maker. He realized the same was true among national private universities: It was as simple as raising the price and upgrading the packaging to create the illusion of quality. Trachtenberg gambled that prospective students would see costly tuition as a sign of quality, and he was right. “People equate price with the value of their education,” he says.
The saddest thing about the amenities arms race is that schools are now stuck with maintaining and upgrading those buildings. Even if they want to cut back and keep tuition low, they’ve got this enormous overhead left from someone else’s bad decisions.