From the individual's perspective, this is a valid point. However, the price discrimination decision is made by the institution, and it clearly has benefits to the institution.
In addition to raising more money, price discrimination also serves to attract better students by competing aggressively on price for students who are good but price sensitive. In this sense, the average student benefits from price discrimination.
Finally, even raising prices for the least price sensitive students increases the tuition to a small fraction of the true economic cost of education. For example, at the private school I attended the $30k/yr of tuition (this was 10yrs ago) covered approximately half of the $60k/yr per student it cost to run the school (the rest came out of the endowmment). There's a broader point here; the cost to California taxpayers of a UC education is well, well in excess of $10.3k/yr.
In addition to raising more money, price discrimination also serves to attract better students by competing aggressively on price for students who are good but price sensitive. In this sense, the average student benefits from price discrimination.
Finally, even raising prices for the least price sensitive students increases the tuition to a small fraction of the true economic cost of education. For example, at the private school I attended the $30k/yr of tuition (this was 10yrs ago) covered approximately half of the $60k/yr per student it cost to run the school (the rest came out of the endowmment). There's a broader point here; the cost to California taxpayers of a UC education is well, well in excess of $10.3k/yr.