Congressional Report Offers New Look At College Price-Aid Relationship

By Katy Hopkins, Communications Staff

Students, parents, and members of the media aren’t the only stakeholders questioning the rising costs of attending college. Policymakers have inquired about it so many times that the Congressional Research Service (CRS) recently investigated, too. 

Specifically, the CRS reports the questions it receives fall within two camps: “Is the full value of an increase in aid likely to be realized by aid recipients?” and “Will an increase in aid have the unintended effect of broadly increasing prices?”

In a new, robust report, "The Relationship Between Federal Student Aid and Increases In College Prices," the CRS searches for answers in existing research, analyzing trends in college pricing from several different angles, as well as various studies on and theories for cost increases. 

There are several ways to look at college costs, the report states, including sticker prices, net prices, and net tuition revenues. Though each analysis will glean different numerical results, all have one trend in common, the CRS found. 

“[E]ach price measure, regardless of source or definition, outpaced inflation,” according to the report.

What’s less clear, the CRS concludes, is why the trends occur, despite no dearth of analyses. The CRS reviewed many reports on the relationship between federal financial aid and college pricing and found “no conclusive evidence in any direction.” 

“This suggests the difficulty in isolating the effect of one variable—financial aid—on a phenomenon—rising college prices—with many likely causes,” the report states. “Put differently, it is not plausible to say that college prices would not have gone up much or at all in the absence of increases in federal financial aid.”

Part of the problem with current analyses is a lack of data, according to the CRS. 

“Research on a potential causal link between student aid increases and price increases is impeded by the limited availability of institutional and individual level data on real prices,” the report states. “What is more, it is not possible to do good descriptive analyses on the prices faced by students at institutions and on pricing behavior of institutions. Without data improvements, desired research may not materialize.”

Given the limitations CRS finds in many previous analyses, its new report offers a comprehensive approach to understanding many factors, studies, and theories that swirl about financial aid and college pricing. 

 

Publication Date: 9/19/2014


Sheree B | 9/22/2014 12:27:54 PM

They aren't saying that it is not possible. What they are stating is that the data does not allow for appropriate conclusions to be formed, at all, in either direction. The very next paragraph indicates this:

“Research on a potential causal link between student aid increases and price increases is impeded by the limited availability of institutional and individual level data on real prices,” the report states. “What is more, it is not possible to do good descriptive analyses on the prices faced by students at institutions and on pricing behavior of institutions. Without data improvements, desired research may not materialize.”

In other words, there is no "good data".

On page 32 of the report, under findings, it states, "The review of studies presented in this report suggests the body of research on the relationship between federal financial aid and college prices does not provide conclusive results in any direction."

David G | 9/19/2014 12:9:54 PM

“Put differently, it is not plausible to say that college prices would not have gone up much or at all in the absence of increases in federal financial aid.”

Not that that will stop the claim from being made. Since when did good data squash the proliferation of a pre-conceived notion?

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