Are Selective Private and Public Colleges Affordable?
Education Economics (Vol. 21/No. 1, February 2013)
Posted: 3 Aug 2009 Last revised: 21 Mar 2013
Date Written: August 1, 2010
We examine college affordability under the existing pricing and financial aid system that awards both non need-based and need-based aid. Using data of freshmen attending a large number of selective private and public colleges, we find that the prices students actually pay for college have increased over time. Need-based grant aid has not kept pace with the substantial increases in non need-based aid. Most importantly, although low-income students received more subsidies than higher-income students, the existing financial aid system does not provide enough affordability to needy students. Nonetheless, the deficiency cannot be attributed to the increases in non need-based aid.
Keywords: College affordability, financial aid, public/private colleges
JEL Classification: I21
Suggested Citation: Suggested Citation