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Fed Research: Student Aid Mostly Raises The Price Of College Tuition
Increasing federal student aid leads colleges to raise tuitions, offsetting the benefit to students, according to new research published by economists with the Federal Reserve Bank of New York.
The new analysis finds that the majority of an increase in subsidized student loans or grants translates to higher tuitions, and that at least in the short run, added loans do not boost enrollment.
"[W]hile one would expect a student aid expansion to benefit recipients, the subsidized loan expansion could have been to their detriment, on net, because of the sizable and offsetting tuition effect," write David Lucca and Karen Shen of the New York Fed and Taylor Nadauld of Brigham Young University.
More: http://www.washingtonexaminer.org
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