Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316847 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11733
Publisher: 
CESifo GmbH, Munich
Abstract: 
State governments provide grants to students to subsidize college attendance. In response, colleges can adjust their tuition, aid policies, and admission standards, affecting equilibrium enrollment and pass-through of aid to students. To quantify demand- and supply-side responses, I develop a model that incorporates the geographic nature of the market and strategic competition between individual colleges. Simulations demonstrate that college responses are meaningful: when students receive $1,000 to attend in-state public colleges, these colleges absorb over 40% of the subsidy on average and raise admissions standards, reducing the enrollment effect of the policy. Close competitors see enrollment declines of 2-3%.
Subjects: 
college choice
college admission
college enrollment
financial aid
mixed oligopoly
non-profit firms
demand estimation
JEL: 
I23
I28
L13
L31
Document Type: 
Working Paper
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