Public higher education has been changing its major funding source from state appropriations to tuition for many decades now, the core reason—alongside increased educational attainment—for the long-run and widespread increase in student indebtedness. During the pandemic, the federal government stepped in to alleviate the burden of student debt, resulting in over three years of pausing required payments on eligible loans. Together, these policies point to a sea change in higher education finance—the burden has been moving away from states and institutions and on to individual students and, at the last resort, the federal government.
Our project aims to study those long-run trends with a particular focus on both the pandemic as an event that accelerated and focused these trends in time, and on institutional segregation within the California higher education system, meaning that different types of students are increasingly sorted into different types of institutions. This work is highly policy relevant as the UC system moves toward a zero-debt policy by 2030, premised on both within-institution cross-subsidies (some students and their families pay more so others can pay less) and on federal policy that is set to become more generous to outstanding debtors, potentially incentivizing institutions to increase both tuition and cross-subsidies. An under-studied aspect of the shifting funding models is that within-institution cross-subsidies may drive lower enrollment by disadvantaged students at more elite institutions (even if those disadvantaged students who do enroll pay less), in order to sustain the funding model, and thereby worsen institutional segregation even as the policy is designed to encourage diversity by reducing funding burdens for those students who do enroll.
Project Updates
Collaborators
- UC Berkeley
- Jain Family Institute