Did the D.C. Tuition Assistance Grant Program Cause Out-of-State Tuition to Increase?

The District of Columbia Tuition Assistance Grant (DCTAG) program is a federally funded financial aid program that allows District residents to pay in-state tuition rates at public colleges and universities throughout the United States. One potential side effect of this program is that colleges and universities that enroll meaningful numbers of D.C. residents may have incentives to increase out-of-state tuition rates. We test this hypothesis empirically. Our preferred specification suggests that there is little evidence that colleges and universities that enroll a high percentage of out-of-state students from D.C. increased out-of-state tuition in response to the DCTAG program.Out-of-State, Nonresident, Tuition, Financial Aid, DCTAG

Do Tuition Fees Affect the Mobility of University Applicants?: Evidence from a Natural Experiment

Several German states recently introduced tuition fees for university education. We investigate whether these tuition fees influence the mobility of university applicants. Based on administrative data of applicants for medical schools in Germany, we estimate the effect of tuition fees on the probability of applying for a university in the home state. We find a small but significant reaction: The probability of applying for a university in the home state falls by 2 percentage points (baseline: 69%) for high-school graduates who come from a state with tuition fees. Moreover, we find that students with lower high-school grades react more strongly to tuition fees. This might have important effects on the composition of students across states.mobility of high-school graduates, tuition fees, natural experiment

The SUNY Tuition Guarantee Proposal

In this paper, the author traces the causes and effects of the recent cuts in state funding of the SUNY school system and discusses the strengths and weaknesses of Chancellor Robert King’s effort to slow tuition increases and increase state funding for SUNY in his “SUNY Tuition Guarantee Proposal”

Educational Federalism and the Quality Effects of Tuition Fees

This paper investigates how the abolishment of a ban on tuition fees affects the quality of higher education with centralized and decentralized decision making. It is shown that tuition fees fully crowd public funds under centralization and quality of university education does not improve. However, with decentralized decisions total higher education spending increases in the tuition level. Therefore, decentralization can lead to a higher quality of university education than centralization although the opposite holds when funding is restricted to be public. --Higher Education,Federalism,Tuition Fees

Competition for the International Pool of Talent: Education Policy and Student Mobility

This paper presents a model of two countries competing for a pool of students from the rest of the world (ROW). In equilibrium, one country offers high educational quality for high tuition fees, while the other country provides a low quality and charges low fees. The quality in the high quality country, the tuition fees, and the quality and tuition fee differential between the countries increase with the income prospects in ROW and the number of international students. Higher stay rates of foreign students lead to more ambiguous results. In particular, an increase in educational quality can be accompanied by a decline in tuition fees. Furthermore, international competition for students can give rise to a brain gain in ROW.Higher education; student mobility; vertical quality dierentiation; return migration; brain gain

Rising Tuition and Enrollment in Public Higher Education

In this paper we review recent trends in tuition at public universities and estimate impacts on enrollment. We use data from the Integrated Postsecondary Education Data System on all public four-year colleges and universities from 1991 to 2007 and illustrate that tuition increased dramatically beginning in the early part of this decade, increasing at rates unprecedented in the past half century. We examine impacts of these tuition increases on total enrollment and credit hours, and estimate differences by type of institution. We estimate that the average tuition and fee elasticity of total headcount is -0.1072. So, at the mean a $100 increase in tuition and fees (in 2006 dollars) would lead to a decline in enrollment of a little more than 0.25 percent, with larger effects at Research I universities. We find no evidence that especially large increases from one year to the next have a disproportionately large negative effect on enrollment.higher education, tuition, enrollment

The Great Cost Shift Continues: State Higher Education Funding After the Recession

As student debt continues to climb, it's important to understand how our once debt-free system of public universities and colleges has been transformed into a system in which most students borrow, and at increasingly higher amounts. In less than a generation, our nation's higher education system has become a debt-for-diploma system -- more than seven out of 10 college seniors now borrow to pay for college and graduate with an average debt of $29,400. Up until about two decades ago, state funding ensured college tuition remained within reach for most middle-class families, and financial aid provided extra support to ensure lower-income students could afford the costs of college. As Demos chronicled in its first report in the series, this compact began to unravel as states disinvested in higher education during economic downturns but were unable, or unwilling, to restore funding levels during times of economic expansion. Today, as a result, public colleges and universities rely on tuition to fund an ever-increasing share of their operating expenses. And students and their families rely more and more on debt to meet those rising tuition costs. Nationally, revenue from tuition paid for 44 percent of all operating expenses of public colleges and universities in 2012, the highest share ever. A quarter century ago, the share was just 20 percent. This shift -- from a collective funding of higher education to one borne increasingly by individuals -- has come at the very same time that low- and middle-income households experienced stagnant or declining household income. The Great Recession intensified these trends, leading to unprecedented declines in state funding for higher education and steep tuition increases.This brief updates our previous analysis of state funding trends by examining trends in state funding and tuition since the Great Recession

The Role of Tuition, Financial Aid Policies, and Student Outcomes on Average Student Debt

Rising college student debt levels have recently received considerable media coverage and have even been the topic of policy proposals that link rising student debt with tuition inflation. This paper examines the role that tuition, financial aid policies, and academic outcomes play in determining variation in average student debt levels across higher education institutions. A focus solely on tuition as the culprit in rising student debt misses the significant role that financial aid policies and student outcomes play in determining debt levels across non-profit higher education institutions. Specifically, being need-blind in admissions, meeting-full-need, limiting loans, and graduating students in high paying majors can have a larger impact on student debt levels than simply the cost of attendance

Does Federal Financial Aid Drive Up College Prices?

The "Bennett Hypothesis" is the theory that : The availability of federal loans -- particularly subsidized loans offering a below-market interest rate and payment of interest as long as the student is enrolled in school -- provides "cover" for colleges to raise their prices, because students can offset a price increase, or at least a portion of that increase, with federal loans.This report examines research that attempts to prove or disprove the Bennett Hypothesis, with a focus primarily on the impact of federal grants and loans on college and university tuition price increases. Section two presents a brief overview of federal student financial aid programs, recent trends in tuition prices, and the economic theory behind financial aid and tuition prices. Section three reviews some of the research that has analyzed the veracity of the Bennett Hypothesis over the years.Section three also describes studies with similar methodologies but contrary findings. The research suffers from limitations in the data used, particularly in the measures of federal aid used as predictors. There are also limitations in the data analysis methodologies employed, including the researchers' inability to fully control for all of the complex factors that go into the decisions that institutions make when determining tuition prices. More details about these issues are presented in this section. The final section summarizes what this body of research tells us about the relationship between federal student aid and tuition prices