Bennett Hypothesis: Financial Aid Increases Tuition

[sanantone]

More people started attending college when financial aid became available. So, you're saying that the solution is to give fewer people the chance to attend college?

One of the theories is that the cost of college has actually gone up due to increased labor costs. If the demand for professors and instructors goes up, then you have to pay them more. The cost of providing healthcare to employees has also gone up. Placing the blame solely on financial aid seems kind of lazy. Supply and demand doesn't only work on that end.

Here is some more common sense. When states reduce subsidies, then colleges have to increase tuition rates. It doesn't get any simpler than that.

Here's even more common sense. The increase in student loan debt is correlated with the increased popularity of for-profit colleges and online programs.

And, some more common sense. Financial aid has been around for longer than I've been alive, but the dramatic increases in tuition are relatively recent and got worse during the Great Recession when state funding had to be cut.

If supply and demand were really that simple, then why are wages growing so slowly when unemployment is so low?