A recent wave of randomized trials in developing countries has shown demand for public services to be highly price elastic, with even low user fees dramatically reducing utilization (Michael Kremer & Alaka Holla 2009). Critics have questioned the relevance of these partial-equilibrium exercises for policymaking on the grounds that they ignore potential general equilibrium effects (Daron Acemoglu 2010). In the education context, a large literature on school segregation and sorting has shown that relatively privileged parents may seek to disassociate themselves from marginal social groups (Thomas J. Nechyba 2006, Sarah Reber 2011). In this paper we explore whether these social interactions generate general equilibrium effects, which might obscure or reverse the downward-sloping demand curves anticipated by partial equilibrium analysis of fee abolition.