Efficient enrollments using high tuition-high aid

Gary Fethke

Journal of Policy Modeling, 2021, vol. 43, issue 3, 543-557

Abstract: The goal of high tuition-high aid is to charge high-pay residents the nonresident tuition net of the state subsidy to support low-income residents. This approach often ignores differences in program costs and presumes the state appropriation will not react. Here tuition and subsidy structures are developed as rules in a welfare-maximization framework. Once fixed costs are accommodated, low-pay resident enrollments can be admitted at marginal cost, thereby achieving efficient enrollments. The models are applied to Penn State University, where it is shown that high tuition-high aid can approximate actual tuition policy, accommodate enrollments of low-income students, and increase total welfare.

Keywords: High tuition-high aid; Quasi-efficient subsidies; Low-cost access; Pay what you can afford tuitions (search for similar items in EconPapers)
JEL-codes: D42 D61 I22 I28 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:43:y:2021:i:3:p:543-557

DOI: 10.1016/j.jpolmod.2021.03.003

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