Pennies on the Dollar: The Surprisingly Weak Relationship Between State Subsidies and College Tuition
However, the state disinvestment hypothesis falls apart upon closer scrutiny of the data. This report uses a fixed-effects regression method, which isolates underlying tuition trends from fluctuations plausibly caused by state disinvestment. At four-year public colleges between 2004 and 2015, every dollar of per-student subsidy cuts was associated with a tuition hike of less than five cents. State subsidies appear to have little, if any, effect on tuition levels at public colleges.