Case #45.0

Federal Financial Aid for Postsecondary Education

Publication Date: January 1, 1975
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Abstract:
The congressional debate leading up to passage of the Education Amendments of 1972 raised fundamental issues concerning federal policy toward higher education. Should the federal government assist students or institutions? Should aid be available only to the poor or to all who face the pinch of the rising costs of a college education? How much student aid should be in the form of grants and how much in the form of loans? After reviewing the history of federal aid to higher education and outlining the programs that were up for renewal or amendment, this case examines the issues confronting policymakers as they neared a decision on the role of federal aid to higher education. The sequel traces developments from 1972 to 1977 and concludes with a discussion of then-current proposals for tuition tax credits and other middle-income assistance plans.

Learning Objective:
This case is designed to give students practice in using a structured analytic approach to clarify a complex public policy issue. The approach is based on concepts of microeconomic theory (competitive markets, externalities, public goods) adapted to issues of distributional equity that arise in the design of social welfare policies. Students are asked to use this approach to organize their thinking about an issue that involves multiple, conflicting objectives and for which issues of equity and efficiency are inseparable.

Other Details

Case Author:
Robert Knauss
Faculty Lead:
Laurence Lynn
Pages (incl. exhibits):
55
Setting:
United States
Language:
English
Funding Source:
Alfred P. Sloan Foundation