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  3. American Economic Journal: Economic Policy
  4. November 2014
  5. Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges

American Economic Journal:
Economic Policy

ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)

Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges

  • Stephanie Riegg Cellini
  • Claudia Goldin
American Economic Journal: Economic Policy
vol. 6, no. 4, November 2014
(pp. 174–206)
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Abstract

We provide the first comprehensive estimates of the size of the for-profit higher education sector and evaluate whether for-profits increase tuition in response to federal subsidies. By using state administrative data we include institutions that do not participate in federal student aid programs and are missed in official counts. Including these institutions doubles the number of for-profits and increases students by one-third compared with official counts. Aid-eligible institutions charge tuition for sub-baccalaureate (mainly certificate) programs that is about 78 percent higher than that charged by comparable programs in nonparticipating institutions, lending some credence to the "Bennett hypothesis" of federal aid capture.

Citation

Cellini, Stephanie Riegg, and Claudia Goldin. 2014. "Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges." American Economic Journal: Economic Policy 6 (4): 174–206. DOI: 10.1257/pol.6.4.174

Additional Materials

JEL Classification

  • H52 National Government Expenditures and Education
  • I22 Educational Finance; Financial Aid
  • I23 Higher Education; Research Institutions
  • I28 Education: Government Policy