Achievably-Efficient Enrollments Using High Tuition-High Aid in Public Higher Education
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With public universities tuitions and state appropriations are determined as efficiently as possible (“quasi-efficiently”) to cover fixed costs, an opportunity arises to admit additional low-income students at marginal cost. Using this tuition-appropriation approach, an implementable form of pay-what-you-can-afford tuition policy (PWYCA) can realize fully-efficient enrollments. This construction can be extended to include a standard, often legal, constraint that state appropriations must be used to support reduced resident tuitions. When applied to budget, tuition, enrollment and appropriation data of colleges at Penn State University, this high tuition- high aid policy not only accommodates additional low-cost enrollments but also increases social welfare.
higher education; high tuition; financial aid; public universities
Required Publisher Statement: Published by the Cornell Higher Education Research Institute, ILR School, Cornell University.