Why is student financial aid a profit-maximizing decision for universities?

Question

Quizplus · Accepted Answer

Universities aim to maximize their profits by accepting as many students as possible while maintaining a positive marginal profit. Financial aid allows students who might not have otherwise been able to afford the tuition to attend the university. By offering financial aid, the university is still able to charge those students a price that is greater than the marginal cost of attending classes, thus generating a positive marginal profit.

Why Is Student Financial Aid a Profit-Maximizing Decision for Universities