"Increased federal student aid, especially to middle-class families, is contributing to the rising cost of higher education, a report by the Center for College Affordability and Productivity says," The Chronicle of Higher Education reports. "The report concludes that federally backed loans should be offered to only low-income families, not expanded to help more middle-class families, and that 'the expanded tuition tax credits in the 2009 stimulus bill are probably a step backward.' The reason, says Andrew Gillen, the report's author and the center's research director, is that colleges are engaged in an 'arms race' to outspend one another, and any extra money that comes in from federal student aid only encourages them to spend more. Right now, colleges have access to students' financial information from Free Application for Federal Student Aid forms, so they know how much each student can afford to pay and can therefore charge each student the highest amount possible without causing that student to have to drop out."

You can read the complete April 7, 2009 Chronicle of Higher Education article on-line.

The full report is available online.

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