Who Benefits From Student Aid? The Economic Incidence of Tax-Based Federal Student Aid

Nick Turner

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: Federal student aid is designed to lower the costs of postsecondary attendance, working to ensure that higher education is widely accessible. The effectiveness of these programs depends crucially on the existence of offsetting price changes. Contrary to the intention of policymakers, I find that schools fully counteract the cost reduction of tax-based aid by lowering institutional aid dollar-for-dollar. This finding implies that colleges and universities capture the financial benefits of tax-based aid at the expense of eligible students and families.

Keywords: federal aid; student aid; higher education; Social and Behavioral Sciences (search for similar items in EconPapers)
Date: 2010-10-20
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Citations: View citations in EconPapers (1)

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