How Much Does Society Pay for Susie Slacker's Education?
I work at a small state university in Florida. At our university, when a student signs up for a full-time load and pays full ("retail price"?) tuition, that student is not even coming close to even covering her fractional share of the university's semester-by-semester operating budget, let alone supplying a little profit -- which is what a consumer model would mean: all costs covered, plus profit. Based on public records, a student at my university is paying for only one tenth her fractional share. The rest of the money comes from the State.
Obviously, this is not a "free market" approach to education. This is a socialized and subsidized approach, in which "society" pays the vast majority of the bill, presumably so that "society" as a whole can benefit from having a certain number of better-educated citizens walking around -- signified by their degrees.
Since "society" doesn't benefit from having slackers and dumbos mixed into that pool of persons, society prefers we fail those who cannot "hack it." This is our job as faculty: we weed out the weak or unwilling so that the BA or BS or MS or MA or what-have-you will signify something useful to "society" -- and it is "society" who pays us for this sorting (or "graduating") that we do.
My state makes matters even more interesting, because my state has a program called "Bright Futures" which has become the third-rail of Florida politics: utterly untouchable. Established by Jeb Bush, it is essentially socialized higher-ed for anyone who graduates from a Florida high school. With a good GPA and a few hours of community service work, a high school graduate gets a full 100% ride to any college in the state and even a stipend every semester to buy books. Mediocre students get 70 percent of Florida's already heavily-subsidized per-credit cost paid for by the state.
The point is, though, when students come up to you complaining that they are "consumers" and you are a "service person" that they are paying for a "product," it might benefit you to look into who's really paying the bill -- the full bill, not just the bill the student or her parents receive. Odds are, if you pay more state taxes than the student does, you're doing more to pay for her education that she is.