The Bennett Hypothesis Turns 30

Many Americans are concerned about the rise of university tuition. “The Bennett Hypothesis Turns 30,” a research paper by Jenna A. Robinson, merges findings from 25 empirical studies on the “Bennett Hypothesis”: Reagan-era Education Secretary William J. Bennett’s theory that large amounts of federal student aid drive up the cost of tuition. 

Executive Summary

  • In 1987, then-secretary of education William J. Bennett penned an article in the New York Times entitled “Our Greedy Colleges.” In it, he wrote, “If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.”
  • This study synthesizes empirical findings from 25 articles published since 1987 in peer-reviewed journals or by respected economic research. institutions. The studies focus on the empirical evidence for Bennett’s theory.
  • Of the 25 studies surveyed, a majority found some effect of federal subsidies on the price of higher education in at least one segment of the higher education market.
  • Based on these findings, we make policy recommendations to help slow the growth of university tuition and fees.