Yes, Blame the Federal Student Loans

Source: American Institute for Economic Research
by Neal McCluskey

“When I began working at the Cato Institute many moons ago …. I came across a report titled ‘The College Cost Crisis,’ from the U.S. House Committee on Education and the Workforce. The authors seemed exasperated that federal student aid never caught up with skyrocketing college prices — both kept rising. I thought the likely reason was pretty obvious: aid enables colleges to raise those prices. But as I pursued this possibility further, I was informed — not always politely — that this had been disproven long ago. It turns out that no, it had not been disproven. Indeed, there is substantial empirical evidence that federal student aid fuels the ivory tower’s infamous price inflation, including roughly a doubling, in real terms, of sticker prices between the 1991-92 and 2021-22 school years.” (01/14/22)