A new study from the prestigious and scrupulously non-political National Bureau of Economic Research (which designates the beginning and end of recessions) blames student loan subsidies for nearly all of the tuition increases that have caused college education to become so expensive as to financially cripple families and indebted students.  Professor Alex Tabarrock explains the highly technical paper at the Foundation for Economic Education: Grey Gordon and Aaron Hedlund create a sophisticated model of the college market and find that a large fraction of the increase in tuition can be explained by increases in subsidies. (snip) Remarkably, so much of the subsidy is translated into higher tuition that enrollment doesn’t increase! What does happen is that students take on more debt, which many of them can’t pay. (snip) …the Econ 101 insight that subsidies increase prices (even net for those who are not fully subsidized) holds true. I wonder where...(Read Full Post)