The growing income inequality in the United States plays an important role in increasing the prices of college enrollment, according to a recent article published in the American economic review.

Together, the effects of increasing income inequality and increased average income represented more than half of the increase in average net enrollment in four-year public and private institutions. Between 1990 and 2016, according to the model CAI and Heathcote.

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    the authors They also write that the growing income inequality can explain the growing gap between the average Ptícita the price of KER and the average net enrollment. The price of the label, or the price of the list, is the total price of the enrollment published for each institution, and the net price is the amount of the students and the families that pay their pocket after it is taken into account Federal and institutional financial aid.

    An institution The educational quality is closely correlated with the average capacity of its students, argue the authors. As a result, all universities and universities are motivated to admit "high capacity" students, regardless of their income, to improve the quality of education they offer. As income inequality grows, institutions must offer more pronounced discounts for high-capacity, low-income students.

    This price strategy, called a discount of enrollment, is widely used by private institutions. It allows institutions to establish high-label prices for their richest students and subsidize at low-income students' prices. Most private universities discount in enrollment to a certain extent, and very few students really pay the listed price. googleg.cmd.push (function () googleg.display ("dfp-ad-article_in_article"););

    Bill Hall, president and founder of Applied Research Policy Inc., a higher education consulting firm, has helped colleges and universities to establish registration strategies and financial aid for some time. The advice he used to give many clients was the same: "high tuition, high help".

    "I am no longer the high-tuned boy. I am a moderate type of registration," said Hall. "We have been aware of a wide price sensitivity through low-income and high-income families. The prices of higher education have risen faster than virtually anything in American society."

    High list enrollment prices and rugged discounts for students with low-income talented have helped some universities diversifying their student agencies, Ronald Ehrenberg, economist and professor of labor and industrial relations from Cornell University.

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    "Many of these institutions They made the decision that to try to attract more relatively low income students, they had to increase the generosity of financial aid policies for these students, "Ehrenberg said. "But unless you can compensate for new sources of income, that will mean you have less income to do everything else."

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