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Why Does College Cost So Much?$
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Robert B. Archibald and David H. Feldman

Print publication date: 2010

Print ISBN-13: 9780199744503

Published to Oxford Scholarship Online: January 2011

DOI: 10.1093/acprof:oso/9780199744503.001.0001

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Federal Policy and College Tuition

Federal Policy and College Tuition

(p.201) 13 Federal Policy and College Tuition
Why Does College Cost So Much?

Robert B. Archibald

David H. Feldman

Oxford University Press

Recent congressional investigations into rising college tuition have laid the groundwork for price controls on tuition. This chapter explores the rationale for tuition controls by examining the relationship between federal policy and how colleges and universities set their tuition. Much of the public discussion is based on an argument first made by former secretary of education William Bennett in 1987. Bennett's hypothesis is that increases in federal financial aid lead to increases in college tuition. This chapter contains an alternative to the Bennett Hypothesis called the Congressional Squeeze. The Congressional Squeeze suggests that the causation is reversed. Increases in college tuition cause increases in federal financial aid. The chapter ends with a discussion of the tuition proposals in the College Opportunity and Affordability Act of 2008. The act does not contain price controls, but there are some sanctions for colleges and universities with high tuition increases.

Keywords:   Bennett Hypothesis, Congressional Squeeze, price controls, tuition, College Opportunity and Affordability Act of 2008

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