Student Subsidies Research Articles

The Changing Selectivity of American Colleges

Over the past few decades, the average college has not become more selective: the reverse is true, though not dramatically. People who believe that college selectivity is increasing may be extrapolating from the experience of a small number of colleges such as members of the Ivy League, Stanford, Duke, and so on. These colleges have experienced rising selectivity, but their experience turns out to be the exception rather than the rule. Only the top 10 percent of colleges are substantially more selective now than they were in 1962. Moreover, at least 50 percent of colleges are substantially less selective now than they were in 1962. To understand changing selectivity, we must focus on how the market for college education has re-sorted students among schools as the costs of distance and information have fallen. In the past, students' choices were very sensitive to the distance of a college from their home, but today, students, especially high-aptitude students, are far more sensitive to a college's resources and student body. It is the consequent re-sorting of students among colleges that has, at once, caused selectivity to rise in a small number of colleges while simultaneously causing it to fall in other colleges. This has had profound implications for colleges' resources, tuition, and subsidies for students. I demonstrate that the stakes associated with choosing a college are greater today than they were four decades ago because very selective colleges are offering very large per-student resources and per-student subsidies, enabling admitted students to make massive human capital investments.

Student subsidy of the internationalised curriculum: knowing, voicing and producing the Other

This paper explores cultural production in online internationalised education. The analysis samples interactions in a Masters of Business Administration (MBA) unit offered online by an Australian university to a student group including enrolments through a Malaysian institution. Part of the curricular content was a consideration of how different cultural contexts shape management practices. The analysis highlights moments where ethnic/national cultures or cultural differences were invoked in texts to enrich this curriculum by design. In this case study, such ‘student subsidy’ was actively encouraged as a vicarious asset made possible with the internationalised student group. To this end, small mixed groups for assessable online discussion were allocated to precipitate such cultural interchange. The analysis displays who voiced what claims about whose culture, the grounds for legitimating such claims, and the kinds of cultural categories thus produced. The discussion then reflects on the degrees of insulation typically produced between cultural categories and how this failed to reflect or engage with the students’ interconnected worlds within the enterprise of online internationalised education.

Guaranteed Student Loans and Subsidies: Who Captures the Rents?

The paper analyzes effects of borrower interest rates and student lender subsidies on federally guaranteed student loan volumes from 1988 to 1994 and from 1996 to 2006. In present and past policy debates, some have contended that lender subsidy cuts would cause some lenders to reduce loan supply or to leave the student loan market. A simple model of the student loan market suggests that if lenders receive economic rents due to overly generous subsidies, small changes in subsidy levels should not affect loan supply. The empirical results based on a variety of GMM panel estimators find evidence of a link between higher SAP margins and higher loan volumes is weak or inconclusive for both the 1988-1994 and 1996-2006 periods. This suggests that subsidy reductions had no discernable effect on student loan volumes. Results also suggest that higher real borrower interest rates reduce student loan volumes for public colleges and universities.

A Dime a Day: The Possibilities and Limits of Private Schooling in Pakistan

This paper looks at the private schooling sector in Pakistan, a country that is seriously behind schedule in achieving the Millennium Development Goals. Using new data, the authors document the phenomenal rise of the private sector in Pakistan and show that an increasing segment of children enrolled in private schools are from rural areas and from middle-class and poorer families. The key element in their rise is their low fees - the average fee of a rural private school in Pakistan is less than a dime a day (Rs.6). They hire predominantly local, female, and moderately educated teachers who have limited alternative opportunities outside the village. Hiring these teachers at low cost allows the savings to be passed on to parents through low fees. This mechanism - the need to hire teachers with a certain demographic profile so that salary costs are minimized - defines the possibility of private schools: where they arise, fees are low. It also defines their limits. Private schools are horizontally constrained in that they arise in villages where there is a pool of secondary educated women. They are also vertically constrained in that they are unlikely to cater to the secondary levels in rural areas, at least until there is an increase in the supply of potential teachers with the required skills and educational levels.

Aspects of Fiscal Federalism in Higher Education Cost Sharing in Latvia

This case study explores devolution of low-income student subsidies, via the national student loans program, from the central to local governments in Latvia by means of decentralizing political and financial responsibility to provide public assistance to low-income students in obtaining funds for higher education. It describes municipal engagement in providing primary loan guarantees and in assuming full risk for low-income student loans. This article argues that although there are venues for local governments to support low-income students' access to higher education, the central government should sponsor this policy politically as well as financially.

A Dime a Day: The Possibilities and Limits of Private Schooling in Pakistan

A Dime a Day: The Possibilities and Limits of Private Schooling in Pakistan

The Cost of Crafting a Class: (In)Efficient Financial Aid Allocation at Two Private Colleges

In order to meet two key objectives, enrollment managers at colleges and universities make extensive use of single equation probability models. The first objective is to generate sufficient financial resources to educate the students enrolled. The more dependent the institution is on tuition revenues, the more important is this objective. The second objective is to distribute and monitor student subsidies according to need, merit, and the institution's diversity goals. This paper reviews the existing theoretical literature on the allocation of financial aid and proposes a more complete method of analyzing the matriculation process. Using proprietary data from two representative small colleges, we demonstrate that single equation estimates of enrollment probabilities can suffer from an endogeneity bias. We propose a simultaneous probit-tobit system that corrects for this bias. Our two major findings are: (1) contrary to the predictions of the theoretical model, institutions of higher education make larger financial aid awards to students with high enrollment propensities and (2) traditional single equation models therefore systematically overstate the true impact of financial aid on enrollment probabilities.

Review: Corals of the World by J.E.N. Veron and Mary Stafford-Smith

Corals of the World. 2000. J. E. N. Veron (author) and Mary Stafford-Smith (editor and producer), Australian Institute of Marine Science, PMB 3, Townsville Mail Centre, Queensland 4810, Australia. 3 volumes, 1382 p. Email: corals@aims.gov.au; web address: http://www.aims.gov.au/corals. US$175.00 or AU$265.00 set; discounts available for conservation and research organizations; student subsidies available.

Financial subsidies for students in Hong Kong

Financial subsidies for students in Hong Kong

Subsidies, Hierarchy and Peers: The Awkward Economics of Higher Education

Higher education is an industry where markets don't clear, prices on average cover less than a third of production costs, the resulting student subsidies are given in strikingly different amounts by different schools, creating a sharply hierarchical market. And an input important to production can be bought only from the firm's own customers. This paper describes the resulting structure of costs, prices, subsidies, and hierarchy using an augmented theory of nonprofits and 1995 national data to show their magnitudes and suggest their often significant implications. Public intuition and economic models of firms, industries, and welfare often yield distorted understanding and dubious public policies.

For-Profit Higher Education: Godzilla or Chicken Little?

(1999). For-Profit Higher Education: Godzilla or Chicken Little?. Change: The Magazine of Higher Learning: Vol. 31, No. 1, pp. 12-19.

The Quiet Revolution in Catholic Schooling in Australia

In the public policy discourse about vouchers, many Catholic school advocates have been aligned with the new conservative critics of public schools. A review of the Dayton, Ohio, area Catholic schools reveals that need-based student subsidies, which are a variation on vouchers, might reverse the declining urban enrollment in Catholic schools and continue their tradition of educating poor and disadvantaged students. This brief overview of changes in Catholic schooling in Australia over the past 30 years identifies four key factors””the smooth transition from religious to lay staff, the reintroduction of government financial assistance, the development of strong Catholic Education offices, and the steady increase in enrollments””to explain the robust state of Catholic schooling in Australia. However, the case suggests that choice schemes can alter the educational aims of schools in unexpected ways.

Choice and Schools: An Analysis of Free Market Financing and Educational Values

In the public policy discourse about vouchers, many Catholic school advocates have been aligned with the new conservative critics of public schools. A review of the Dayton, Ohio, area Catholic schools reveals that need-based student subsidies, which are a variation on vouchers, might reverse the declining urban enrollment in Catholic schools and continue their tradition of educating poor and disadvantaged students. However, the case suggests that choice schemes can alter the educational aims of schools in unexpected ways.

Public Subsidies for Students in Private Tertiary Education

Private training establishments are a growing sector in New Zealand tertiary education, although their students receive lower subsidies than do those at public institutions. The determination of public subsidies for private tertiary education students is complex and is based upon philosophical arguments, trends in demand and the capacity of private and public sectors. This issue has gained prominence in New Zealand since the release of the Government Green Paper on tertiary education last year, which suggested equal subsidies for students in private and public tertiary education. This paper reviews the general arguments and overseas examples in this area, before examining the New Zealand situation and outlining options for the future.

INFLUENCE OF TUITION AND STUDENT AID ON WITHIN‐YEAR PERSISTENCE BY ADULTS IN 2‐YEAR COLLEGES

This article uses the 1987 National Postsecondary Student Aid Study to examine the influence of student subsidies on within‐year persistence by nontraditional college‐age students enrolled in 2‐year colleges. The findings include the following: (a) tuition charges were negatively associated with within‐year persistence of adult students in 2‐year colleges and (b) student aid subsidies were insufficient to mitigate the negative effects of tuition.

Rates of return as informer of public policy

Policy makers often employ rate of return (RoR) information in formulating public resource allocation decisions. A noteworthy present example is the World Bank, which uses RoR to advise Third World countries (TWCs) as they set student subsidy levels, tuition levels, and allocations by level of education (i.e., elementary, secondary, higher). This paper demonstrates that in the main RoR may be inappropriate policy devices for such aims because (1) major validity problems surround RoR formulations, (2) emphasis upon average RoR may misinform policy, and (3) RoR calculations are more sensitive to cost than benefits variations. It is concluded that true RoR to education are higher than conventionally estimated and in most cases support increased public resource allocations to various levels of education. Further, RoR evidence does not support reallocations from higher to lower educational levels, and World Bank advice to TWCs, most notably sub-Saharan Africa, may be in error.

University Financing 1979–86

Abstract After a brief resumé of the background to the growth of the university system in the sixties and seventies, ‐ the period of the Robbins report and its implementation ‐ the paper discusses in some detail the financial changes that have occurred over the period 1979–1986. This period covers the removal of overseas student subsidies, the massive cuts exercise of 1981, and the reallocation exercise of 1986. The methods of approach used by the UGC to the 1981 and 1986 allocations are compared and contrasted, whilst the paper concludes with some thoughts on the possible long term consequences of the approach that is now being adopted for grant allocations.

Distribution Equity in Student Subsidies for Higher Education in California: 1967-1977

Distribution Equity in Student Subsidies for Higher Education in California: 1967-1977

Differential versus equal student subsidies in post-secondary education: A current Canadian dispute

This paper examines a current proposal that students in higher education should have equal subsidies. The proposal has recently been made on grounds of efficiency and is therefore linked with the justification of subsidies because of public benefits (externalities) from education. The argument is that since we are ignorant of the differential strengths of public benefits from each educational program, it is a safe rule to subsidize each at an equal rate. This equality argument is further supported in this paper with the observation that marginal public benefits diminish with increasing educational duration. This efficiency argument is clearly distinguishable from that of “equity” or “equality of opportunity.”

Efficient allocation of subsidies to college students

This paper describes how the standard economic constrained maximization model can be applied to improve the efficiency of allocation of subsidies to college students. After a general discussion the model is applied to the allocation of a subsidy to freshman students at the University of California according to equity objectives. This model suggests that student subsidy programs should be based on explicit consideration of student willingness to pay for college in relation to carefully specified enrollment objectives. The administration of such a program would require changes in the currently used financial “need” approach to student subsidy programs. The case is made that the necessary changes are feasible.