The Price Is Not Right: Exploring Unintended and Heterogeneous Outcomes of Tuition Regulation

• In Event: State Policy and Educational Equity

Abstract

College affordability presents a substantial barrier to access. As growth in college prices continues to outpace improvements to aid, wages, and inflation, states have begun to implement tuition regulation policies to arrest price growth and increase affordability. Using a natural experiment in Tennessee, we present first estimates of the effect of one new type of tuition-control measure: binding ranges. Using a quasi-experimental difference-in-differences design, we find evidence of unintended and heterogeneous effects on institutions’ ultimate pricing levels. While we detect no significant changes in universities’ in-state tuition and fee rates, we do find significant increases (1.7-2.2%) at two-year community colleges. Further, we find evidence that two-year institutions also increased out-of-state rates (4.5-7%) while four-year institutions decreased (1.2-3.8%).

Authors

• Taylor K. Odle, University of Pennsylvania

• Manuel S. Gonzalez Canche, University of Pennsylvania