9 years ago
2
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,...
Continue Reading
http://theweek.com
Join the Discussion
I'm not at all surprised by this finding. I had suspected it for years, especially while watching tuition for my PharmD program jump from $31k the year I started to $37k by my last year. That's nearly a 20% increase in only 3 years! And what did I do about it? Took out more federal student loans because at that point what choice do I have?
Gee, everybody thinks they need college and has access to time deferred loans to pay for it. I'm surprised the costs are that low.