When asked in a research survey why he didn’t apply to a selective U.S. college, one high-achieving, low-income student showed his misunderstanding of the commonly used term "liberal arts," which refers to schools that offer a broad range of arts and sciences:

"I am not liberal," he wrote.

Many bright, economically disadvantaged U.S. students end up at colleges with poor graduation track records and limited resources—even if they could attend better institutions and pay less money after receiving financial aid, according to research from economics professors Caroline Hoxby, of Stanford, and Christopher Avery, of Harvard. Many of these students neglect to apply to selective schools altogether, even though such schools often seek diversity in their student bodies. It’s a waste of academic talent, a contributor to inequality, and a drag on economic mobility.

Bad information is the cause, according to Hoxby and Turner's research, which was recently published in a National Bureau of Economic Research working paper. And that’s a problem that’s entirely fixable. Students are misinformed about cost: They experience sticker shock at schools that appear to charge $50,000 or more a year for tuition, and they don’t realize that the net price they would actually pay with financial aid is much lower, often below $10,000.