Quote Of The Day

Published on 6/8/2010 in Economics, Education, Myths and University. 1 Comment

“In this article about college funding, Kevin Carey says something that I’ve long believed, which is that government-supported financial aid doesn’t quite work how you might imagine: colleges can just raise their prices along with any aid packages that come along. The price tag for college is not fixed, and so what looks like a subsidy for low-income students can just end up being a way for universities to jack up their prices by a corresponding amount.” — Andrew Gelman

1 Response to “Quote Of The Day”

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  • Dom
    6/21/2010 at 8:50 am

    Isn’t this true of the home mortgage tax deductions also? At one time there was no deduction, and a home was on the market for $50,000. Then the deductions came along (to “help” the home buyer), and realtors told the home-owners “those people who could afford your home at $50,000 can not afford it at $55,000. So raise the price. Nothing lost.” So the deduction actually raised the price of homes. It was a boon for the home-seller, not the home buyer.

    Oddly, realtors representing the seller are required by law to tell the seller to raise the price.

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