Study: Federal Loans Drive Up Private College Tuition

The availability of subsidized federal student loans play a role in increasing tuition, particularly at less-selective private nonprofit colleges with relatively affluent student bodies and for-profit colleges, a study by researchers for the Federal Reserve Bank of New York finds. The study adds to a body of studies -- frequently challenged by higher education leaders and some economists -- suggesting that federal financial aid contributes to tuition increases by easing constraints on students and families.