Link between federal aid and tuition increases

[JoJosMom]

An interesting study by the NY Fed finds a link between rising college tuition and the availability of federal aid.

 

Credit Supply and the Rise in CollegeTuition: Evidence from the Expansion in Federal Student Aid Programs

[frogger]

I personally believe easy money and the mentality that everyone must own a home is why homes are so expensive. This is similar. In textbook economics a government can shift supply and demand curves through taxation and subsidies.

 

So we comprehend that "government" at various levels has increased housing, health care, and education costs at tremendous levels or we rip out of econ texts the whole chapter on shifting supply and demand curves.

[G5052]

Also declining state support for higher education, and the attitude that nearly everyone should try to go to college.

 

I teach at community colleges that hover around a 25% graduation rate, and many, many of the students who don't make it have loans. It really is a sad situation.

[LucyStoner]

Demand side subsidies usually do drive up price. It's one of the reasons school vouchers make zero sense, especial since proponents tend to be big on their support for supply side.

 

Supply side subsidies do more to keep tuition low.

[LucyStoner]

Also declining state support for higher education, and the attitude that nearly everyone should try to go to college.

 

I teach at community colleges that hover around a 25% graduation rate, and many, many of the students who don't make it have loans. It really is a sad situation.

The community colleges here don't participate in loan programs and haven't for more than 20 years. Students who qualify can get grants (pell, state) and scholarships.