Bennett Hypothesis: Financial Aid Increases Tuition

[sanantone]

The Bennett Hypothesis says that increases in financial aid leads to increases in tuition. 

I mads this new thread since the discussion was off topic. Dfrecore linked to a Federal Reserve report that concludes that increases in aid lead to increases in tuition. There are some issues with that report. 

One of the co-authors admitted that it is hard to determine if the Pell Grant and unsubsidized loans affect tuition at all. The study only found a marginal correlation between subsidized loan availability and tuition increases at for-profit and private, nonprofit schools. There is a stronger correlation between decreased state aid and tuition increases at public universities. 

We all know know that correlation does not equal causation. Some universities started admitting more out-of-state and international students leading to increased tuition averages. 

https://www.usnews.com/opinion/articles/...c-colleges

After looking at several studies, there appears to be no consensus on whether or not increased financial aid availability leads to higher tuition rates. However, many studies point to for-profit colleges being disproportionately responsible for increases in student loan debt and default rates.