Profiteering From State Aid: Evidence From the For-Profit College Market

• In Event: 44.084 - Roundtable Session 18
  In Roundtable Session: 44.084-18 - Tuition and Aid Policies: How State and Federal Policy Shapes Students and Institutions

Abstract

The Bennett hypothesis – which suggests that colleges capture some increases in student aid as increased revenues – has been studied in a variety of nonprofit settings with mixed findings and has been supported in the for-profit sector by recent studies. Using a comparative interrupted time series design, the author examines the validity of this hypothesis as it pertains to state grants in the for-profit sector. The text shows evidence from the expansion of the New York State Tuition Assistance Program that supports the Bennett hypothesis thus bolstering previous evidence and expanding our understanding of the efficacy of state aid. The implication for state policy makers is to cautiously consider the unintended consequences of student aid expansion.

Author

• James Dean Ward, University of Southern California