Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges

52 Pages Posted: 10 Feb 2012

See all articles by Stephanie Riegg Cellini

Stephanie Riegg Cellini

George Washington University - School of Public Policy and Public Administration (SPPPA)

Claudia Goldin

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 2012

Abstract

We use administrative data from five states to provide the first comprehensive estimates of the size of the for-profit higher education sector in the U.S. Our estimates include schools that are not currently eligible to participate in federal student aid programs under Title IV of the Higher Education Act and are therefore missed in official counts. We find that the number of for-profit institutions is double the official count and the number of students enrolled during the year is between one-quarter and one-third greater. Many for-profit institutions that are not Title IV eligible offer certificate (non-degree) programs that are similar, if not identical, to those given by institutions that are Title IV eligible. We find that the Title IV institutions charge tuition that is about 78 percent higher than that charged by comparable institutions whose students cannot apply for federal financial aid. The dollar value of the premium is about equal to the amount of grant aid and loan subsidy received by students in eligible institutions, lending some credence to a variant of the "Bennett hypothesis" that aid-eligible for-profit institutions capture a large part of the federal student aid subsidy.

Suggested Citation

Cellini, Stephanie Riegg R. and Goldin, Claudia, Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges (February 2012). NBER Working Paper No. w17827. Available at SSRN: https://ssrn.com/abstract=2002579

Stephanie Riegg R. Cellini (Contact Author)

George Washington University - School of Public Policy and Public Administration (SPPPA) ( email )

805 21st Street, NW
Media and Public Affairs Building, Room 602
Washington, DC 20052
United States

Claudia Goldin

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-3934 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-588-0356 (Phone)
617-868-2742 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
44
Abstract Views
334
PlumX Metrics