In the two decades following 1990, subsidized federal loans per full-time student more than tripled. Economic analysis indicates that this expansion in subsidies
A) reduced the cost of a college education for all students.
B) increased the cost of a college education for all students.
C) reduced the net cost of a college education for students receiving the subsidies, but increased the cost of college for other students.
D) increased the net cost of a college education for those receiving the subsidies, but reduced the cost of college for other students.

Question

Quizplus · Accepted Answer

The expansion in subsidies reduced the net cost of a college education for students who received the subsidies. However, it also led to an increase in the cost of college for other students who did not receive the subsidies, as colleges were able to increase tuition prices knowing that students had access to more federal aid. Therefore, the overall cost of a college education increased for some students while decreasing for others.

In the Two Decades Following 1990, Subsidized Federal Loans Per