How Taxpayer Subsidies for Students Drives Up College Tuition

Quickly on the heels of the release “Love Gov” -- the Independent Institute’s satirical videos series on meddlesome government -- a new study from the Federal Reserve Bank of New York concludes that federal aid to college students raises the cost of higher education. Duh! Many observers have been puzzled by the relentless increase in tuitions charged by private and public schools alike -- at a growth rate greater than that of any component of the consumer price index, including health care. Some blame the price increases on the greed of campus administrators. But that assessment is an unfair oversimplification that fails to ask: what has enabled schools to hike tuitions so much? Most U.S. colleges and universities, whether public or private, operate as not-for-profit entities, but that doesn’t mean they are run like charities indifferent to the bottom line. If the tuition at a school is, say, $10,000 per year, and some third party finances half that...(Read Full Article)

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