Does the Bennett Hypothesis Hold in Professional Education? An Empirical Analysis
Policymakers have been debating the Bennett Hypothesis—whether colleges increase tuition after the federal government increases access to student loans—for decades. Yet most of the prior research has focused on studying small changes to loan limits or Pell Grants for undergraduate students. In this study, I examine whether business schools (the most popular master’s program) and medical schools (one of the most-indebted programs) responded to a large increase in federal student loan limits in 2006 following the creation of the Grad PLUS program by raising tuition or living expenses as well as examining whether student debt burdens also increased. Using two quasi-experimental estimation strategies and program-level data from 2001 to 2016, I find little consistent evidence to support the Bennett Hypothesis in either medical or business schools.
KeywordsBennett hypothesis Tuition Student debt Medical schools Business schools
This project was supported by AIR Grant #RG15149 from the AccessLex Institute and the Association for Institutional Research. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of the AccessLex Institute or the Association for Institutional Research. I would like to thank Joseph Fresco and Olga Komissarova for their research assistance throughout this project and Dominique Baker, Amy Li, Judith Scott-Clayton, and Douglas Webber for their helpful thoughts in framing this line of research. All errors are my own.
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