Brookings on one aspect of school choice

Fortunately, the solution to this challenge is straightforward. We can ensure that students make decisions that are in their best interest by making information about the investment value of various degrees available to them as they shop for college. In practice, this means that students should know about the outcomes previous graduates have faced (rate of employment, earnings, etc.). If students are armed with this information before choosing a college then we can be sure their choices reflect preferences rather than confusion over what they are buying.

A second reason to be concerned about this issue is government subsidies. Student aid programs (Pell grant and Stafford loans) base award amount on cost of attendance. This means that students attending schools with lots of amenities will receive more aid than students attending schools with similar instructional value but fewer amenities. This effect is mitigated by caps on award amounts in both programs, but it still creates bad incentives for both students and colleges. While we don’t want to restrict a student from purchasing a “Cadillac” college degree, we certainly don’t want the government to subsidize it. The simplest way to eliminate this bad incentive is to revise aid award formulas to ignore cost of attendance. Instead, aid awards could be based on average cost within the relevant set of comparable institutions (i.e. community college, four-year, etc.)

http://www.brookings.edu/blogs/brown-center-chalkboard/posts/2013/02/06-higher-ed-costs-akers?cid=em_brown020613