Chapter 23 Public Intervention in Post-Secondary Education

This chapter provides an overview of the nature of state and federal subsidies to higher education and the empirical evidence on the impacts on students' college enrollment decisions. The discussion includes a brief discussion of the incentives created by federal and state subsidies for institutions and for students, a summary of trends in enrollment rates by race and income, a survey of the empirical evidence on the impacts of financial aid policies, and a discussion of the possible role supply constraints may have played on the rise in the payoff to schooling over the last two decades.