"Decades-Old Theory on Student Loans and College Costs Faces Scrutiny. For nearly 40 years, policymakers have believed that a connection exists between federal student loans and the prices colleges charge for tuition. The idea is that if students are not paying the full sticker price, colleges will simply raise their rates to make up for the loss. However, a new examination of this long-held theory is raising questions about its validity, and whether it can actually lead to lower costs for students. As the debate over rising college costs continues, experts are re-evaluating this fundamental assumption, with potential implications for the future of higher education."
The idea that there's a connection between federal student loans and what colleges charge dates back almost four decades. But it's unclear that link can lead to lower costs.
