Does federal student aid raise tuition? New evidence on for- profit colleges
Open accessAbstract
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. (JEL H52, I22, I23, I28)
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There is evidence that increases in financial aid encourage institutions to raise tuition prices, primarily among for-profit colleges.
“There is some evidence to support this, but primarily among for-profit colleges, perhaps because of their high reliance on federal financial aid funded students.”
From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Cellini & Goldin, 2014
For-profit schools eligible for federal Title IV aid charge significantly more than similar institutions not eligible for federal aid.
“for-profit schools that are eligible to receive federal Title IV aid charge significantly more than similar institutions that are not eligible for federal aid (Cellini & Goldin, 2014).”
From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Cellini & Goldin, 2014
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References 18 · Cited by 170
Research works printed but not linked: 12
- Cellini, Stephanie Riegg (2009). "Crowded Colleges and College Crowd-Out: The Impact of Public Subsidies on the Two-Year College Market," American Economic Journal: Economic Policy 1 (August), pp. 1-30.
- Cellini, Stephanie Riegg (2010). "Financial Aid and For-Profit Colleges: Does Aid Encourage Entry?" Journal of Policy Analysis and Management 29 (Summer), pp. 526-52.
- Deming, David, Claudia Goldin and Lawrence F. Katz (2012). "The For-Profit Post Secondary School Sector," Journal of Economic Perspectives 26 (Winter), pp. 139-64.
- Deming, David, Claudia Goldin and Lawrence F. Katz (2013). "For-Profit Colleges," The Future of Children, 23 (Spring), pp. 137-63.
- Dynarski, Susan M. and Judith E. Scott-Clayton (2008). "Complexity and Targeting in Federal Student Aid: A Quantitative Analysis." In J. Poterba, ed., Tax Policy and the Economy Vol. 22, pp. 109-150.
- Long, Bridget Terry (2004a). "The Impact of Federal Tax Credits for Higher Education Expenses." In C. Hoxby, ed., College Choices: The Economics of Where to Go, When to Go, and How to Pay for It. Chicago: University of Chicago Press and the National Bureau of Economic Research, pp.101-168.
- Long, Bridget Terry. (2004b). "How do Financial Aid Policies Affect Colleges? The Institutional Impact of the Georgia HOPE Scholarship," Journal of Human Resources, 39(3), pp. 1045- 66.
- Rizzo, Michael J. and Ronald G. Ehrenberg (2004). "Resident and Non-Resident Tuition and Enrollment at Flagship State Universities." In C. Hoxby, ed., College Choices: The Economics of Where to Go, When to Go, and How to Pay for It. Chicago: University of Chicago Press and the National Bureau for Economic Research, pp. 303-53.
- Rosenbaum, James E., Regina Deil-Amien and Ann E. Person (2006). After Admission: From College Access to College Success. New York: Russell Sage Foundation Press.
- Turner, Nicholas (2012). "Who Benefits from Student Aid: The Economic Incidence of Tax- Based Aid," Economics of Education Review 31 (August), pp. 463-81.
- Turner, Sarah E. (2006). "For-Profit Colleges in the Context of the Market for Higher Education." Chapter 3 of D. W. Breneman, B. Pusser, and S. E. Turner, eds., Earnings from Learning: The Rise of For-Profit Universities. Albany: State University of New York Press.
- Singell, Larry D. and Joe A. Stone (2007). "For Whom the Pell Tolls: The Response of University Tuition to Federal Grants-in-Aid," Economics of Education Review, 26(3), pp. 285-95.
- Authors
- Cellini, S. R., & Goldin, C.
- Affiliations
- National Bureau of Economic Research (US)
- Venue
- American Economic Journal: Economic Policy
- Publisher
- American Economic Association
- Published
- 2014-11-01
- Volume
- 6
- Issue
- 4
- Pages
- 174-206
- ISSN
- 1945-7731 (ISSN-L)
- 1945-774X
- OpenAlex
- W2013753206
- Cited by
- 170
- References
- 18
- Citations by year
- 2026: 5 · 2025: 6 · 2024: 9 · 2023: 11 · 2022: 11 · 2021: 8 · 2020: 19 · 2019: 18 · 2018: 8 · 2017: 17 · 2016: 13 · 2015: 18 · 2014: 9 · 2013: 11 · 2012: 7
- FWCI
- 70.02
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- American Economic Journal Economic Policy (publishedVersion)
- National Bureau of Economic Research (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Digital Access to Scholarship at Harvard (DASH) (Harvard University) (submittedVersion, cc-by)
- SSRN Electronic Journal (submittedVersion)
- Funders
- Agencia Estatal de Investigación
- Topics
- Social Sciences › Education › Higher Education Research Studies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Politics, Economics, and Education Policy
- Social Sciences › Education › School Choice and Performance
- Keywords
- federal student aid, tuition fees, for-profit colleges, federal subsidies, certificate programs, higher education funding, student enrollment
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