Building an Economy that Works for Everyone

A Failing Grade: “High Tuition/High Aid”

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In the face of impending budget cuts to higher education, Washington policymakers are considering adopting a “high-tuition/high-aid” model of financing. In theory, by significantly increasing tuition, students who can afford it pay more; those students who cannot, benefit from larger financial aid packages supported by the tuition increase.

But the experience of universities that have adopted this model shows that high-tuition/high-aid preserves neither access nor quality. Examination of results from four Research Tier 1 universities that switched to the high tuition-high aid model finds:

• Enrollment of low-income and under-represented minority students declines due in part to “sticker shock.”

• Enrollment of high-performing students declines due to greater competition with private colleges.

• Educational quality decreases as schools shift funds in the struggle to maintain access.

• Financial aid packages emphasize loans that contribute to high levels of student debt.

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