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Are selective private and public colleges affordable?

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  • John A. Karikari
  • Hashem Dezhbakhsh

Abstract

We examine college affordability under the existing pricing and financial aid system that awards both non need-based and need-based aid. Using data of freshmen attending a large number of selective private and public colleges in the USA, we find that the prices students actually pay for college have increased over time. Need-based grant aid has not kept pace with the substantial increases in non need-based aid. Most importantly, although low-income students received more subsidies than higher-income students, the existing financial aid system does not provide enough affordability to needy students. Nonetheless, the deficiency cannot be attributed to the increases in non need-based aid.

Suggested Citation

  • John A. Karikari & Hashem Dezhbakhsh, 2013. "Are selective private and public colleges affordable?," Education Economics, Taylor & Francis Journals, vol. 21(1), pages 60-78, February.
    • Handle: RePEc:taf:edecon:v:21:y:2013:i:1:p:60-78
    DOI: 10.1080/09645292.2010.545195
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    1. Caroline M. Hoxby, 2000. "Benevolent Colluders? The Effects of Antitrust Action on College Financial Aid and Tuition," NBER Working Papers 7754, National Bureau of Economic Research, Inc.
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    3. Christopher Avery & Caroline Minter Hoxby, 2004. "Do and Should Financial Aid Packages Affect Students' College Choices?," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 239-302, National Bureau of Economic Research, Inc.
    4. Gordon C. Winston & Catharine B. Hill, 2005. "Access to the Most Selective Private Colleges by High-Ability, Low-Income Students: Are They Out There?," Williams Project on the Economics of Higher Education DP-69, Department of Economics, Williams College.
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