Why Colleges Act As They Do

Career College Central summary:

  • Research on higher education tends to have difficulty answering many broad questions. Do increases in federal spending on student financial aid drive up college tuitions? Do cuts in state budgets for public colleges impede college-going? Do public and private colleges admit and award financial aid in similar or different ways?
  • Why are these questions so difficult to answer? There is much variation among states and such great diversity in the types of postsecondary institutions. But several economists believe they have developed at least the beginnings of a theoretical framework to examine how state and federal funding affect the American higher education system, writ large.
  • In a paper released by the National Bureau of Economic Research, researchers assert that the model they've created — accounting for institutions' differing missions and students' differing economic and academic backgrounds — can begin to answer some of the questions that divide researchers.
  • They confirm that federal spending driving up tuitions, at least at private colleges, and to cuts in state financial support resulting in lost enrollments at public four-year colleges.

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