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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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Subsidies and Tuition Setting

Subsidies and Tuition Setting

(p.137) 9 Subsidies and Tuition Setting
Why Does College Cost So Much?

Robert B. Archibald

David H. Feldman

Oxford University Press

This chapter starts the part of the book focused on tuition setting. The first part lays out the relationships among costs, institutional subsidies, student-specific subsidies, list-price tuition, and the part of total tuition that students have to finance. The second part of the chapter focuses on institutional subsidies. These are the subsidies public institutions receive from state appropriations and the subsidies that public and private institutions receive from endowment earnings and gifts. These institutional subsidies allow institutions to charge an average tuition that is less than the average cost of providing the education. The chapter ends by exploring how the relative importance of these subsidies has evolved recently. Public institutions have become more dependent on tuition, while private institutions have become less dependent on tuition.

Keywords:   costs, endowment earnings, institutional subsidies, list-price tuition, state appropriations, student-specific subsidies

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