Price Deregulation and Equality of Opportunity in Higher Education

Awarded Scholars:
Kevin M. Stange, University of Michigan
Rodney Andrews, University of Texas, Dallas
Project Date:
Jan 2015
Award Amount:
$105,738
Project Programs:
Social, Political, and Economic Inequality

The benefits associated with acquiring increased years of schooling, especially a college degree, are well-established. A prominent benefit is increased social mobility. But the opportunities for completing a college education are not equally distributed. Gaps in college entry and graduation have widened between students from low- and high-income families over recent decades. Less affluent students are also less likely to attend higher quality institutions, even when they have skills and abilities equal to those of more affluent students. Because a number of states are enacting or considering tuition deregulation in public universities, a major concern is that low-income students may be disproportionately affected, exacerbating existing inequalities in postsecondary enrollment and degree attainment.

In 2003, the Texas Legislature enacted price deregulation in public universities by allowing them to vary tuition rates by program, course level, academic period, term, credit level, or any other educational dimension the institutions deemed appropriate. Additional measures were implemented to address concerns that these changes would negatively impact low-income students. Programs that set tuition rates in excess of certain limits were required to set aside a portion of those funds to assist low-income students, for example, by increasing need-based financial assistance and no-interest loans.

Stange and Andrews will examine the consequences of this tuition deregulation on the representation of more disadvantaged students in higher quality institutions and high-return majors. They will describe trends in the representation of low-income students in high-return institutions and majors before and after deregulation; characterize how sticker price, financial aid, program quality and capacity changed in response to deregulation; and explore the association between deregulation-induced changes in program attributes and changes in low-income student sorting.

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