Veteran Educators or For-Profiteers? Tuition Responses to Changes in the Post 9/11 GI Bill

Abstract

In 2010, Congress reauthorized the Post-9/11 GI Bill, changing reimbursement rates from widely-varying by-state maximums to a nationwide limit. This created exogenous changes in the financial aid that colleges could claim for veterans, varying in direction and magnitude. We detect tuition responses only for for-profit colleges, where we estimate a one percent pass-through rate. This for-profit response is driven by colleges in states that decreased benefits, colleges with higher concentrations of veterans, and colleges whose pre-change tuition was above the state maximum but below the upcoming increased nationwide level; the last group has a pass-through rate of eight percent.

Keywords: For-Profit Colleges, GI Bill, Bennett Hypothesis

JEL Classification: I22, I23