Maarten De Ridder, Simona Hannon, Damjan Pfajfar, 21 April 2022

An expansion of the federal Pell Grant programme – the largest US scholarship programme that helps lower-income students attend college – has recently been proposed. This column shows that, besides the long-run benefits of making college more affordable, Pell Grants significantly raise local economic activity. Local income rises by 2.4% when Pell Grants increase by 1% of income, far exceeding the effect of, for example, defence spending. For-profit colleges raise tuition fees when grants become more generous, reducing the multiplier effect of grants at these schools. 

Susan Dynarski, 06 February 2019

Susan Dynarski of the University of Michigan discusses how a pilot scheme promising low-income high-school students four years of free tuition and fees if they were accepted on a university course more than doubled application rates. 

Antonio Cabrales, Maia Güell, Rocío Madera, Analía Viola, 24 July 2018

In most of Europe, the state pays for a university education, meaning that university finances are both regressive and cyclical. This column asks how the alternative system of income-contingent university loans would fare in Spain. The analysis suggests that the policy is feasible even in a country with a relatively poorly functioning labour market for young graduates.

Gill Wyness, Richard Murphy, Judith Scott-Clayton, 21 October 2017

The question of who should pay for higher education continues to be hotly debated across the world. This column uses the case of the English higher education system to examine whether it is possible to charge relatively high tuition fees and at the same time protect enrolments, access, and university quality. The analysis shows that since the move from a free higher education system to a high-fee, high-aid system, university enrolment has increased substantially, with students from the poorest backgrounds experiencing the fastest increases in participation. Moreover, university funding per head has recovered dramatically since the introduction of fees.

Ian Fillmore, 04 March 2015

Colleges in the US charge high sticker prices but routinely offer discounts to individual students. This column presents research showing that colleges use a student’s federal aid form to learn about willingness-to-pay and to engage in substantial price discrimination in a way that amounts to a tax on income, with the primary effect of increasing tuition revenues. Nevertheless, the price discrimination also results in some redistribution to low-income students as well as a modest increase in student–college match quality.

Neil Shephard, 23 November 2009

The financial position of the UK Government suggests that its university sector may have its funding squeezed. In CEPR Policy Insight 42, Neil Shephard argues that universities should be able to charge income contingent tuition fees if their teaching costs are not met by the current tuition payments.

Neil Shephard, 23 November 2009

The UK needs to address its budget deficit. This column, introducing a new CEPR Policy Insight, argues against cuts in government contributions to the tuition chargeable by universities, warning that they would make the UK poorer, economically and culturally. It suggests instead additional deferred fees that graduates can pay later in their career when their income allows it.


CEPR Policy Research