501. CATO Institute: Making College More Expensive: The Unintended Consequences of Federal Tuition Aid
- Author:
- Gary Wolfram
- Publication Date:
- 01-2005
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- As Congress debates the reauthorization of the Higher Education Act, it should heed Friedrich Hayek's warning that democracy is “peculiarly liable, if not guided by accepted common principles, to produce over-all results that nobody wanted.” One result of the federal government's student financial aid programs is higher tuition costs at our nation's colleges and universities. Basic economic theory suggests that the increased demand for higher education generated by HEA will have the effect of increasing tuitions. The empirical evidence is consistent with that—federal loans, Pell grants, and other assistance programs result in higher tuition for students at our nation's colleges and universities.
- Topic:
- Economics, Education, and Government
- Political Geography:
- United States