Student Loans Increase Tuition, Not Enrollment
Just another confirmation of what many people already knew.
This article is from The Week, hat tip to Instapundit.
Study: Federal student loans increase tuition, not enrollment
A report from the Federal Reserve Bank of New York suggests that federal student aid programs are doing more harm than good. When subsidized federal loans have the effect of “relaxing students’ funding constraints,” universities respond by raising tuition to collect the newly available cash.
The resultant tuition hikes can be substantial: The researchers found that each additional dollar of Pell Grant or subsidized student loan money translates to a tuition jump of 55 or 65 cents, respectively. Of course, the higher tuition also applies to students who don’t receive federal aid, making college less affordable across the board.
The report also found that subsidized federal loans do not appear to increase enrollment.
Comments
My state university comes right out and admits they hike tuition to match federal money. 25 years ago, the yearly cost to attend here (tuition, fees, room, board, books) was $3600. This fall, the yearly cost will be $23,000.