Reply To: Rising College Tuition


As with any good, its price rises when demand for it increases relative to supply of it. College education is heavily subsidized by governments. State governments grant direct subsidies to college and universities. Here are statistics on California subsidies to higher education, which were $14.5 billion last year:

Another subsidy is through federal government Pell grants to students, which were $44 billion in 2012:

Then there are student loan guarantees by governments:

Governments restrict the production and supply of higher education by chartering institutions of higher education as not-for-profit organizations.

Check out the work of Richard Vedder at the Center for College Affordability: