Feds Discover Their Own Aid Is To Blame For Rising (College) Tuition

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That indicates that the biggest direct beneficiaries of federal aid are schools, rather than the students hoping to attend them.

Well, as my 11 year old might say, duh!

Pour billions and billions into a market and guess what happens? The price goes up. It’s pretty basic stuff. And yet no one in government (until now) has been able to realize (let’s be real honest – to admit) that this is what is happening in higher education.

You want to see a bubble in the USA? College is a huge bubble.

(From The Daily Caller)

College tuition rates have consistently risen faster than inflation for some 25 years. One theory for the rise, dubbed the “Bennett hypothesis,” was put forward by Ronald Reagan secretary of education William Bennett, who argued that hikes in government student aid simply gave colleges a free pass to hike tuition.

Now, the New York Fed’s research suggests there’s some merit to the idea, and that it means the government could be spending billions on education to no effect.*

Click here for the article.