Colleges raise tuition when federal student aid programs increase, a study from the Federal Reserve Bank of New York has found. The study looked at Pell Grants, subsidized federal loans and unsubsidized federal loans, finding that when the programs offered more money between 2007 and 2010, as much as 65% of the added funds went to tuition increases. Meanwhile, tuition also rose for students not receiving federal aid.
Here is a Forbes article about it, and here is an article from the St. Louis Post-Dispatch about this study and issue of college tuition and federal student aid.
