Chapter

Subsidies and Tuition Setting

Robert B. Archibald and David H. Feldman

in Why Does College Cost So Much?

Published in print October 2010 | ISBN: 9780199744503
Published online January 2011 | e-ISBN: 9780199866168 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199744503.003.0009
Subsidies and Tuition Setting

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This chapter starts the part of the book focused on tuition setting. The first part lays out the relationships among costs, institutional subsidies, student-specific subsidies, list-price tuition, and the part of total tuition that students have to finance. The second part of the chapter focuses on institutional subsidies. These are the subsidies public institutions receive from state appropriations and the subsidies that public and private institutions receive from endowment earnings and gifts. These institutional subsidies allow institutions to charge an average tuition that is less than the average cost of providing the education. The chapter ends by exploring how the relative importance of these subsidies has evolved recently. Public institutions have become more dependent on tuition, while private institutions have become less dependent on tuition.

Keywords: costs; endowment earnings; institutional subsidies; list-price tuition; state appropriations; student-specific subsidies

Chapter.  4791 words.  Illustrated.

Subjects: Financial Markets

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