This vicious cycle perpetuates itself/ This is how college tuition has risen so drastically in recent years. It needs to stop.
The College Fix reports:
Most research supports theory that student financial aid leads to increased tuition
Thirty years ago, then-Secretary of Education Bill Bennett theorized that rising federal financial aid was having a perverse effect on tuition, letting “greedy colleges” raise their prices without blowback from students and parents.
Much research has been done on the “Bennett Hypothesis” since then, and while it doesn’t all point in the same direction, most of it does, according to a new meta-analysis by the Martin Center for Academic Renewal.
The last major review of the literature was published in 2003, finding the effect of federal aid on tuition ranged from “negligible to as much as 50 percent of the increase in aid,” President Jenna Robinson writes.
After another 14 years of research – resulting in a total of 25 analyses published in peer-reviewed journals or by “respected economic research institutions” since 1987 – the results are “compelling”: Fourteen of the 25 studies show “some positive effect of federal subsidies on the price of higher education in at least one segment of the higher education market.”
Robinson says three of the seven that found “no Bennett effect” also has the smallest sample sizes, because they were conducted much earlier than other studies.
One of the most recent, in 2015, found an even greater “pass-through effect” than a 1998 study on the same phenomenon: a tuition increase of 60 cents for every dollar of aid, up from 50 cents on the dollar.
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