If parents (and their children) are loaded with biases, is behavioral economics useful?
I suspect the core bias is parents wanting to feel they have done everything possible to help the kid, rather than maximizing the kid's (or the world's) expected return.
I think that there are at least two other biases worth mentioning. One is concern with standing in one's peer group. It seems to me that a lot of parents compare the college that their child attends with the colleges that other children attend. For many parents, the status of the child's college appears to strongly affect the self-esteem of the parents. Perhaps that accounts for the story I read recently in the Washington Post that quoted a college admissions officer as saying that almost all of the complaints they receive about students not being admitted come from parents.
The other bias, closely related, is fear of nonconformity. I believe that too many college students are not emotionally ready for the experience. They go because their peers and their parents expect them to go. Their parents expect them to go because their parents' peers expect their children to go.
I think that the way to break the college cartel may be to offer a one-year program that is in between high school and college. It would be more grown-up than high school, but not as unstructured and removed from life as college.
College is a highly unnatural setting. Students do not have to shop for food, worry about budgets for entertainment, or face consequences for behavior that is irresponsible if not downright illegal. Instead of learning life skills, they are learning escape-from-life skills.
Jackie and I cannot come up with any good reasons why our youngest daughter, who has the best grades and SAT scores of all of our children, would not be better off finding an apartment with a friend and attending community college. We're not persuaded that we got our money's worth out of sending the other two to four-year colleges.